Soybean Value Chain and Market Analysis

Home , Economy of Zambia

Final Draft Report

SOYBEAN VALUE CHAIN AND MARKET ANALYSIS

Prepared for the International Labour Organisation

Munguzwe Hichaambwa Christian Chileshe Bernadette Chimai-Mulenga Christian Chomba Mukwiti Mwiinga-Ngcobo

June 2014 ______

26a Middleway Road, PostNet Box 99 Kabulonga, Lusaka Zambia www.iapri.org.zm

Page i

ACKNOWLEDGEMENTS

We are grateful to be accorded the opportunity to conduct this study. Special thanks go to Ms Naomy Lintini and her team at the ILO Zambia Country Office for ably facilitating the study as well as inviting one of the Study Team members to participate in a related Value Chain Development Training Workshop which was also part of stakeholder consultation for the study. We acknowledge the meaningful contributions that workshop participants made to this study through their deliberations and these have been accordingly taken into account in this analysis. We are further grateful to the other stakeholders we consulted in Lusaka, Eastern, Central and Copperbelt Provinces without whose views, we believe, this study would have been incomplete. The review inputs of the Value Chain Development Training Workshop Facilitators as well as participants in the study validation workshop are also greatly appreciated.

Authors

Page i

TABLE OF CONTENTS

ACKNOWLEDGEMENTS ...... i TABLE OF CONTENTS ...... ii LIST OF TABLES ...... iv LIST OF FIGURES ...... iv LIST OF ABBREVIATIONS AND ACRONYMS ...... v EXECUTIVE SUMMARY...... vii 1.0 INTRODUCTION ...... 14 1.1 Background ...... 14 1.2 Study Objectives ...... 15 2.0 METHODOLOGY ...... 17 2.1 Technical Approach ...... 17 2.2 Data Analysis and Reporting ...... 17 3.0 DEMAND AND SUPPLY ANALYSIS ...... 18 3.1 International ...... 18 3.2 Regional ...... 19 3.3 National ...... 20 4.0 FUNCTIONING OF THE MARKET SYSTEM IN ZAMBIA ...... 23 4.1 Mapping the Value Chain ...... 23 4.2 Details of the Market System ...... 24 4.2.1 Policy/Enabling Environment ...... 24 4.2.2 Inputs Supply ...... 26 4.2.2.1 Smallholder Farmer Access to Inputs ...... 26 4.2.2.2 Large Scale/ Commercial Farmer Access to Inputs ...... 28 4.2.2.3 Analysis of Constraints and Opportunities ...... 28 4.2.3 Production ...... 29 4.2.3.1 Smallholder Soybeans Production ...... 29 4.2.3.1 Large Scale Commercial Soybeans Production ...... 31 4.2.3.2 Harvesting and Threshing ...... 31 4.2.3.3 Analysis of Gross Margins ...... 32 4.2.3.4 Analysis of Constraints and Opportunities ...... 33 4.2.4 Aggregation and Marketing ...... 33 4.2.4.1 Aggregation and Main Marketing Channels from Smallholder Farmers ...... 33 4.2.4.2 Main Marketing Channels from Large Scale Commercial Farmers ...... 35 4.2.4.3 Analysis of Constraints and Opportunities ...... 36

Page ii

4.2.5 Processing ...... 37 4.2.5.1 Commercial Processing ...... 38 4.2.5.2 Small Scale and Domestic Processing ...... 38 4.2.5.3 Analysis of Constraints and Opportunities ...... 38 4.2.6 Wholesaling/Retailing ...... 39 4.2.7 Consumption ...... 40 5.0 KEY OPPORTUNITIES FOR YOUTH PARTICIPATION ...... 42 6.0 POTENTIAL FOR RURAL FOOD/NUTRITIONAL SECURITY ...... 46 7.0 CONCLUSIONS AND RECOMMENDATIONS ...... 47 REFERENCES...... 51 ANNEXES ...... 52 Annex 1: Primary Data Collection Tools ...... 52 A. Farmer Focus Group Discussion Guide ...... 52 B. `Individual Key Informant Discussion Guide ...... 53 C. Field Observation Guide ...... 54 D. Gross Margins/Value Addition/Transportation Questionnaire ...... 55 Annex 2. Terms of Reference ...... 57 Annex 3: List of Stakeholders Consulted ...... 63 Annex 4: List of Participants at ILO Value Chain Development Training Workshop ...... 66

Page iii

LIST OF TABLES

Table 1: Soybeans Production, area planted and yields: 2003-2014 ...... 21 Table 2: Estimated Zambia Soybeans Demand and Supply ...... 22 Table 3: Breakdown of Value Capture by Stage of Soybean Processing ...... 24 Table 4: Main sources of 2011/12 soybean seed among smallholder farmers ...... 27 Table 5: Soybean production and farmer characteristics by age group ...... 30 Table 6: Smallholder soybean performance indicator in 2010/11 season by seed variety category ...... 30 Table 7: Gross margin analysis for Emerging/Commercial Production ...... 32

LIST OF FIGURES

Figure 1: World Soybeans Production and Consumption Trends ...... 18 Figure 2: Trends in Zambia soybeans production and total area planted ...... 21 Figure 3: Zambia Soybean Value Chain Map ...... 23 Figure 4: Smallholder soybean production by province, 2010/11 agricultural season ...... 29

Page iv

LIST OF ABBREVIATIONS AND ACRONYMS

ACET African Centre for Economic Transformation ACF Agricultural Consultative Forum AOL Agri Options Ltd ASP Agricultural Support Programme ATS Agrochemicals Agricultural Technical Services Agrochemicals CAADP Comprehensive African Agriculture Programme CAGR Compound Annual Growth Rate CASU Conservation Agriculture Scaling Up Project CEEC Citizens Economic Empowerment Commission CETZAM Christian Enterprise Trust of Zambia CFS Crop Forecast Survey CMR Farm Consolidated Mining Reef Farm COMACO Community Markets for Conservation CSB Corn Soy Blend CSO Central Statistical Office CIMMYT International Maize and Wheat Improvement Centre DACO District Agricultural Coordinator DRC Democratic Republic of Congo EFE Emman Farming Enterprises ETG Export Trading Group FAB Farming as a Business FAO Food and Agriculture Organisation of the United Nations FGDs Focused Group Discussions FNB First National Bank FRA Food Reserve Agency GMO Genetically Modified Organism HEPS High Energy Protein Supplement IAPRI Indaba Agricultural Policy Research Institute IITA International Institute for Tropical Agriculture ILO International Labour Organisation KIs Key Informant Interviews MADA Mumbwa Agro-Dealers Association MAL Ministry of Agriculture and Livestock MDG Millennium Development Goal MMT Million Metric Tonnes

Page v

MT Metric Tonnes MSME Micro, Small and Medium Enterprises MSYCD Ministry of Sport, Youth and Child Development NAIP National Agricultural Investment Plan NAIS National Agricultural Information Services NATSAVE National Savings and Credit Bank NCZ Nitrogen Chemicals of Zambia NFNC National Food and Nutrition Commission NGO Non-Governmental Organisation PAZ Poultry Association of Zambia P4P Purchase for Progress RALS Rural Agricultural Livelihoods Survey RYEP Rural Youth Enterprise Programme SAO Senior Agricultural Officer SIMLEZA CIMMYT IITA Sustainable Intensification of Maize-Legume systems in Easter Province SPSS Statistical Package for the Social Sciences SSA Sub Saharan Africa TMT Thousand Metric Tonnes TVP Textured Vegetable Protein UN United Nations UNICEF United Nations International Children Emergence Fund US United States WFP World Food Programme YDF Youth Development Fund ZANACO Zambia National Commercial Bank ZARI Zambia Agriculture Research Institute ZMW Zambian Kwacha (rebased) ZNFU Zambia National Farmers Union

Page vi

EXECUTIVE SUMMARY

Background

The Government of the Republic of Zambia with support from the International Labour Organisation and the Food and Agriculture Organisation has formed and will be implementing the Rural Youth Employment Programme (RYEP). Its main focus is promotion of decent jobs for youth (aged from 18 to 35 years according to the Zambia Youth Development Policy) and improved food security through rural enterprise development based on soybeans as one of the selected value chain. It will therefore seek to support the Zambian Government to increase market awareness regarding the commercialization of soybeans in order to pave way for the successive development of the market systems underpinning the value chain, maximizing the employment creation effects in the process; facilitating a more enabling local policy environment for the development of the market system underpinning the production and processing of soybeans, with the view to accelerate the rate of market entry by young entrepreneurs and the contribution of soybeans towards food and nutritional security in Zambia.

This assignment was mainly commissioned to provide an understanding regarding the functioning of the soybeans market system in Zambia including the knowledge, skills and support services available for value addition processes with the view to identify opportunities for participation of young people within the market system as well as to establish how the soybeans market system can contribute towards food and nutritional security of rural communities. The specific objectives are to:

a) Quantify potential of the soybean value chain for food security, nutrition, rural enterprise and youth employment; b) Examine the underlying factors (bottlenecks/challenges) inhibiting the soybeans value chain from achieving increased productivity and full commercialization among MSMEs; c) Identify the gross margin potential along the various stages along the value chain; d) Identify opportunities for increasing the soybean value chain’s contribution towards food and nutritional security in rural areas; e) Identify path ways for sustainable change that can unlock market opportunities and youth employment creation potential along the soybeans value chain; and f) Identify leverage points for interventions that would support the further development of the soybeans market system in rural enterprise development.

The primary interest of RYEP in analysing the soybeans value chain is to create a broader understanding of the market system underpinning the Zambian soybeans subsector with the view to identify the relevant key players for fostering market interactions that can enhance rural enterprise development. The research will thus seek to identity the constraints and weak points within the soybeans value chain and market system that affect its capacity to unlock the potential for job creation and its ability to effectively contribute towards food and nutritional security as well as economic livelihoods among local communities. It will further seek to establish the underlying causes of these constraints and weaknesses and to identify the leverage points within the value chain upon which an intervention strategy by RYEP could be developed.

Page vii

Methodology

The study used review of secondary literature as well as primary data collection. Secondary literature review focused on analysis of the market-system supporting the core value chain at various levels including the meta-level (people influencing other people’s views about soybeans such as local mass media), macro-level (people facilitating polices, laws and regulations governing business in the sector such as the Ministry of Agriculture and Livestock (MAL)), and the micro-level (core value chain actors as well supporting suppliers of goods and services at both production and post-production levels). This process also helped identify data gaps for filling up during the field research work targeting people growing soybeans, people trading soybeans, people processing soybeans, people wholesaling soybean based products, people retailing soybean based products and people consuming soybeans and soybean based products as well as those providing various services to all these value chain actors. Particular attention was paid to capture potential leverage points of hubs for value chain performance.

Primary data collection was largely qualitative using focus group discussions, key informant interviews and, where possible, direct observation. Issues to explore at various stages of the value chain were identified and checklists to use in the focused group discussions (FGDs) and KIs in selected districts and sub-district areas. Furthermore, one study team member attended the ILO Value Chain Development Training Workshop in Livingstone from 5th to 9th May 2014 during which time the soybean and fish value chains were used for practical demonstrations/analysis with participants reflecting on real value chain experiences which also formed an important input in the analysis of this study.

Findings

The following are key opportunities for youth participation across the value chain:

Page viii

choosing crops to grow at the beginning of the marketing season. The market challenge can be addressed by strategically linking the farmers to buyers throughout grower arrangements or contracts. This way, farmers would be assured of a ready market for their produce while assuring buyers of sufficient quantities for their needs. Some of the farmers could also be linked (or could themselves integrate vertically) to other value chains like the fish and poultry value chains to assure supply of soybeans for feed formulation. This would foster growths not only in the soybean chain but also other chains that it feeds into increasing demand for soybean. Linkages to other projects like the P4P would be mutually beneficial. 3) Provision of mechanized services: Without any form of mechanisation, a household that has grown a hectare of soy beans would need to manually harvest, thresh and pack the produce in about 12 bags. This is in addition to other farming and non-farming chores. Introduction and wide appreciation of harvesting and threshing machines will assist in up-scaling as the drudgery that the manual processes create would have been addressed. This would help usher producers to grow to levels that enable them benefit from economies of scale. Within the context of “multiform mechanisation” appropriate equipment ownership arrangements can be explored. Though the equipment may appear cheap, there could be hidden costs in terms of need for regular maintenance and replacement parts. As such, there is need to develop a cadre of individuals that are able to not only eventually fabricate such equipment, but who are able to maintain them in good state of repair. This may be an opportunity for youths and local technical training institutions. Intermediation may be required in identifying an appropriate relationship structure between the providers of equipment, the financiers and the local smallholder farmers. There is an important role to be played in facilitation of clustering of smallholder farmers to enable economical access to harvesting and threshing equipment. Given the largely unimpressive history of rural cooperatives in Zambia, this facilitative role will not be as easy, and will require influencing mind set and practices through the use of appropriate organisation development approaches. Support could be provided to youth-owned/run enterprises that could be hiring out harvesting and threshing services provide bulking facilities and also provide market information that assists farmers determine when to offload their produce. 4) Aggregation/Marketing: Opportunities exist for youth to participate in aggregation through the following means:  Facilitating small scale farmer clustering to increase volumes and negotiating power e.g. WFP P4P;  Support to local agro-dealers (with youth involvement) to enhance their capacity to aggregate and market soy from small scale farmers e.g. WFP P4P;  Advocating for establishment of warehouse receipts system e.g. WFP P4P; 5) Processing: Most commercial processors employ a good number of youth to work in their processing plants. The processors have preference for mature and energetic youth aged between 20 and 40 years. There are no specific educational requirements for the youth to work in these plants as the work they do is mechanical and they would be under the supervision of a plant supervisor. Key leverage points are:  There is need for more awareness on the benefits of processed soybeans among the producers of soybeans with the hope that they could vertically integrate into soybeans processing.  Potential for increasing home processing though increased information on home recipes e.g. soy sausages, cakes, meatballs, etc.  Need for developing appropriate and low cost technologies to address challenges with heating and grinding of soybeans  Several of lessons can be learnt from the success of sunflower where most farmers continue to process it for home consumption or sell oil to the local market. Setting up SME’s with small scale

Page ix

equipment for roasting and crushing soybeans so that capital constrained farmers can be taking their soybeans for processing there like they do for sunflower  Considering the promotion of crop-livestock integration which will not only promote local processing of soybeans, but will also provide additional livelihood activities for farmers (including young people). This is especially so during dry season when they are not producing any rain fed crops.  Training efforts in processing of soybeans coupled with linkages to markets for the processed products

Conclusions and Recommendations

The soybean value chain though in its early stages of development characterised by low production and productivity, low product knowledge and consumption, various market development constraints and market volatility, no doubt, provides a promising opportunity for youth rural entrepreneurship and food and nutrition security. This is through its potential for growth as demanded by the poultry feed industry which is also increasing in rural areas and increasing acceptability for human consumption as it provides high quality nutrition (proteins) at much lower cost than the most common proteins sources. However, the value chain needs facilitation in order to fulfil this potential and the following leverage points at the various stages of the chain are identified:

Input supply: The key issue at input supply especially as it relates to smallholder soybean production is widespread use of farmer retained seed (recycled seed) which significantly lowers the yield potential. Admittedly improved soybeans seed varieties can be recycled for about three seasons without losing vigour and potential yields but smallholder farmers continuously use local recycled seed. There is a general lack of awareness in seed selection and management which requires first starting from planting improved seed and then select better quality seed from the harvest for planting the following season for three seasons before buying in new seed. Furthermore, there is a general lack of awareness in the use of inoculum which assists the soybean plants to fix their nitrogen from the soil. Soybeans yield of smallholders who grow the crop under out-grower arrangements are much better because they are provided with improved seeds, inoculum and other chemicals especially herbicides to use in the growing of the crop. There are definite opportunities for youth employment in this part of the value chain through agro-dealerships with linkages to either private input suppliers or out-grower companies. Therefore Recommendation 1 is Promoting Community Youth Agro-Dealership. Through this initiative, there would be need to:  Create greater awareness for proper input usage  Establish links with the following actors: o Non-state actors such as SNV involved in community-based agro-dealer development for lesson learning, identification of leverage point/complementarities; o Potential agro-dealers and facilitate entrepreneurship and business development; o Financial institutions such as NATSAVE, ZANACO, Finance Bank, etc. for appropriate financing arrangements; and o Agro-dealers at district centres to facilitate supply chain development

Page x promotes, among other things, legume rotations (e.g. soybeans) in conservation farming cropping systems. This together with optimal input use would increase productivity and profitability though there would need to be linkages to output markets at the next stage of the value chain. Within the production function of the value chain opportunities exist for rural youths to provide contracted mechanical services for land ploughing, harvesting and threshing to enable smallholders grow and manage larger plots of soybeans. Appropriate implement suppliers are available (locally) and financing arrangements can be facilitated as is already being done with Musika Development Initiatives and the ZNFU Lima Credit Scheme and Bunjimi Assets Plus, for example, including applying for credit financing under YDF and CEEC. Based on the above Recommendation 2 is Improving Production/ Productivity through Strengthening Market Linkages with emphasis on:  Creating and enhancing linkages between producers, aggregators and processors;  Improving flow of market information to stimulate production and productivity;  Greater farmer exposure;  Develop synergies with projects under FAO’s CASU, WFP’s P4P, Musika, ZNFU, NAIS, etc.;  Improved access to technologies, extension and finance; and  Creation of opportunities for vertical integration.

Furthermore Recommendation 3 is Support for Farm Mechanisation characterized by:  Creation of linkages between farmers, farm equipment suppliers, financiers, etc.;  Facilitating development of smallholder clusters to enhance economical utilisation of equipment;  Establishment of enterprises that provide services to farmers; and  Support for skills development through partnership with training institutions.

Aggregating/Marketing: This is an important function of the smallholder soybean value chain. Currently rural aggregators/assemblers are providing an invaluable service but lack the capacity to expand and provide a more organized and predictable output market linkages service. Some processors such as Mount Meru have facilitated provision of futures contracts serviced by financial institutions which has helped increase the aggregators’ working capital to purchase soybeans from smallholder farmers and then supply to the processors. These arrangements are commendable but can be expanded to greater scales. Possible synergies or leverages can be created with the WFP P4P which is facilitating smallholders and/or small traders aggregating and supply of legumes for its home grown school feeding programme. Within this Programme (P4P) training is provided in post-harvest handling and storage, and the concept of warehouse receipt system is being promoted. Therefore, Recommendation 4 is Support for Improved Aggregation with focus on:  Working with WFP P4P, etc. to facilitate farmer clustering that improves opportunities for aggregation;  Support to enterprises engaged in aggregation to enhance capacities;  Advocacy towards enactment of warehouse receipts system; and  Support for appropriate supply contracting/financing arrangements.

Page xi

Scale Farmers in Zambia”. There is otherwise existing potential demand for soy milk and soy flour for school feeding programmes under WFP and under-five clinics and designated wards in hospitals under the Ministry of Health. All in all, there is clear evidence of soybean uptake for human consumption but current understanding on volumes, motivation, market segments, market prices and market growth is limited. This calls for dedicated market study to increase this understanding and design appropriate intervention measures.

With regard to the livestock feed industry, there currently is adequate installed processing capacity for commercial soybeans processing, although the demand is still not met. The poultry industry, which dominates the soybean livestock feed processing, is still growing. The main limitation in this area appears to be the low local soybean production levels, as a result of a number of factors, such as low productivity among small scale farmers, and high input costs.

Based on the foregoing Recommendation 5 which is Support to Soybean Processing needs to focus on:  Creating greater awareness of nutritional value and domestic soy processing options;  Introduction of appropriate technology for community-based processing;  Capacity development in technology use and maintenance;  Developing crop-livestock integration to raise demand; and  Tapping into lessons from other crops processed within communities e.g. sunflower and maize that increased small-scale processing does not reduce supply to commercial processors but actually stimulates production and consequently supply to commercial processing units.

Furthermore, Recommendation 6 is Promotion of Consumption of Soy Products through:  Commissioning of a dedicated soy consumer market study on which specific intervention strategies can be formulated;  Increasing awareness for need for greater awareness of soy product range, besides nutritional value;  Addressing soybean product branding needs to address negative perceptions; and  Strengthening of large scale procurement arrangements of soy products e.g. by WFP and other institutional buyers.

Policy: At the policy level, imports of the cheaper cooking oil are clearly a threat to the development of the sector and a clear way forward will need to be developed by the policy makers. ZNFU and other stakeholders commissioned a study in 2013 to estimate the demand and supply of edible oils in Zambia and it was clear that the cheap palm oil imports were hampering the soybeans production and processing sector. Recommendation 7 Focusing on Policy Level Interventions should focus on:  Support towards the following: o Implementation of National Agriculture Investment Plan (NAIP). o Implementation of the Agriculture Credit Act; o Implementation of electronic input voucher scheme; o Development of appropriate market protection policies intended to help value chain development; and o Updating Farming As a Business Toolkit to strengthen aspects to do with entrepreneurship;  Development of a more comprehensive framework for addressing issues affecting youth (self) Employment in Agriculture; and  Greater focus on rural youth training.

Page xii

Location of pilot programme: In order to take advantages of potential synergies with the FAO CASU project and the WFP P4P the study recommends that the pilot activities of the RYEP be set up in Eastern and Central province to take advantage of suitable soybean production areas and the districts in which these projects are operating and also the fairly relative proximity to commercial soybean processors. The Ministry of Sport, Youth and Child Development is opening up a Youth Training Centre at the former refugee camp in Mporokoso in Northern Province and a small soybean processing plant has been opened in Kasama within the same province with financial support from CEEC. It is expected that this plant will largely source its soybeans from the northern parts of Central Province and the southern parts of Muchinga Province including Mbala and Mungwi Districts of Northern Province. This gives opportunities for youth employment in input supply and output aggregating/marketing. In summary, Recommendation 8 for Location of Pilot Programme recognizing the need for strong links with other actors FAO CASU, WFP P4P, MSYCD, COMACO, ProfitPlus, etc. is as follows: 1) Eastern Province (Lundazi, Sinda and Petauke):  Focusing on smallholder participation across value chain, with much scope for further development; 2) Central province (Mkushi, Mumbwa and Chibombo):  Focusing on high level of commercialisation with good opportunities for providing demonstration; and 3) Northern Province (Mporokoso and Kasama):  Focusing on MSYCD activities around training and processing

Page xiii

1.0 INTRODUCTION

1.1 Background

Zambia’s demographic statistics reveal a largely young population with 20.8% of the population aged between 15-24 years and 36.7 % between 15-35 years. This demographic structure has a direct impact on the Government’s efforts towards achieving the nation’s economic development objectives.

Despite impressive economic growth trends reported by the World Bank (2011), significant gains in job creation, equality and poverty reduction remain. Extreme poverty in rural areas (57.7 %) is four times higher than in urban areas (13.1 %) and the country will have to reduce extreme poverty by 13.3 percentage points in the 5 years from 2010 to 2015 to attain the Millennium Development Goal (MDG) target. Zambia’s income Gini coefficient of 0.60 (Global Human Development Report, 2013), places it in the category of countries with the highest income inequality. Young people have been worst hit by this negative situation with registered youth unemployment currently at 28% in the age group 20-24 years and 16% in the age group 25-29 years. While statistically significant evidence from rural areas is scarce, from ample case-specific evidence it can be safely stated that the unemployment figures for rural areas are higher, particularly if underemployment is also measured. Indications are that youth unemployment rates will continue to rise with about 280,000 women and men entering the labour market in search of work every year. Furthermore, the young people are strongly disadvantaged in the competition for the approximately 700,000 jobs in the formal economy since they typically lack the skills, work experience and social networks of their older peers. With the current Government’s proposal to increase the retirement age from 55 to 65 years, the predicament of the young people with regard to employment is likely to worsen.

The phenomenon of jobless growth particularly in rural areas is explained by a number of factors, among them, prominently, the one-sided focus of investors on extractive industries, where financial returns are higher due to global demand for copper but where labour absorption rates are low. By direct comparison, in agriculture, the second main pillar of the Zambian rural economy where production methods are far more labour intensive, economic activities have expanded at a much slower pace. While maize output has soared on the back of favourable weather conditions and backed by input subsidies and guaranteed prices, commercial scale production of other crops like soybeans has picked up more slowly and commercialization potential remains yet to be fully exploited and the related employment creation potential for the rural economy yet to be unlocked.

According to a Soybeans Value Chain Analysis Report (TechnoServe, 2011), the Zambian soybean market is growing rapidly with current production dominated by commercial farmers and considerable scope for more production growth and exports. There is potential for increasing production even more through introduction of productivity enhancement methods.

However, despite strong market potential, soybeans remains a marginally attractive commercial crop due to a high cost base, poor transport infrastructure and uncertain trade policies. It is also still not very attractive crop for smallholders and small enterprises as they lack appropriate inputs, expertise and a sure market. There is therefore need to make improvements along the value chain in order to take advantage of the growing domestic market and export opportunities.

There is currently good soybeans processing capacity in Zambia, which can increase further through development of more processing units. Some processors are however vertically integrated into feed

Page 14 manufacturers to livestock companies, so their focus is more on making sure they meet their own feed demand.

While Government has in principle drawn a thematic link between youth (aged from 18 to 35 years according to the Zambia Youth Development Policy) employment promotion and food security, it is yet to demonstrate how to make this link actionable in practice. For example, none of the Micro, Small and Medium Enterprise (MSME) development initiatives underway along the value chain for soybeans in the country is tailored towards rural youth. Unsurprisingly then, the rural youth employment creation track record of many rural MSME development initiatives tends to be mixed; sometimes, the employment creation effect is simply not known since emphasis is laid more on boosting agricultural output or increasing rural household income while the net employment creation effect is really tracked and figures are not disaggregated by age cohort (indicating low-level priority assigned to this target group segment). Where new jobs were created and the figures disaggregated by age cohort, the results show that young people - young women in particular - have been least likely to secure employment.

The main focus of the Rural Youth Employment Programme (RYEP) is on promotion of decent jobs for youth and improved food security through rural enterprise development. It will therefore seek to support the Zambian Government to increase market awareness regarding the commercialization of soybeans in order to pave way for the successive development of the market systems underpinning the value chain, maximizing the employment creation effects in the process; facilitating a more enabling local policy environment for the development of the market system underpinning the production and processing of soybeans, with the view to accelerate the rate of market entry by young entrepreneurs and the contribution of soybeans towards food and nutritional security in Zambia.

1.2 Study Objectives

In view of the above, the main objective of this assignment is to provide an understanding regarding the functioning of the soybeans market system in Zambia including the knowledge, skills and support services available for value addition processes with the view to identify opportunities for participation of young people within the market system as well as to establish how the soybeans market system can contribute towards food and nutritional security of rural communities. The specific objectives are to:

Page 15 and market system that affect its capacity to unlock the potential for job creation and its ability to effectively contribute towards food and nutritional security as well as economic livelihoods among local communities. It will further seek to establish the underlying causes of these constraints and weaknesses and to identify the leverage points within the value chain upon which an intervention strategy by RYEP could be developed.

Page 16

2.0 METHODOLOGY

2.1 Technical Approach

The study used the International Labour Organisation (ILO) “Value Chain Development for Decent Work” (ILO, 2009) manual as a guide for designing and conducting the research work. Review of this manual was followed by that of secondary literature with special focus on analysis of the market-system supporting the core value chain at various levels including the meta-level (people influencing other people’s views about soybeans such as local mass media), macro-level (people facilitating polices, laws and regulations governing business in the sector such as the Ministry of Agriculture and Livestock (MAL)), and the micro-level (core value chain actors as well supporting suppliers of goods and services at both production and post-production levels). This process also helped identify data gaps for filling up during the field research work targeting people growing soybeans, people trading soybeans, people processing soybeans, people wholesaling soybean based products, people retailing soybean based products and people consuming soybeans and soybean based products as well as those providing various services to all these value chain actors. Particular attention was paid to capture potential leverage points of hubs for value chain performance.

In addition, analysis of national smallholder representative Crop Forecast Survey (CFS) conducted annually and the Rural Agricultural Livelihoods Survey (RALS) of 2012 was conducted to establish smallholder soybean production and marketing behaviour. This also helped locate areas of more smallholder production of soybeans which were used as the focal of points of analysing the value chain market system and informed the sampling of provinces/districts and sub district areas in which to carry out the field work for the study. The selected districts were Chibombo, Mumbwa, Mkushi (Central Province), Mpongwe, Masaiti (Copperbelt), Lundazi, Chipata, Chadiza and Katete (Eastern Province). Sub-district areas visited for field work were selected based on information from key informants (KIs) as well as high soybean producing constituencies in these districts which were ascertained from quantitative data analysis of the CFS and RALS data.

Primary data collection was largely qualitative using focus group discussions, key informant interviews and, where possible, direct observation. Issues to explore at various stages of the value chain were identified and checklists to use in the focused group discussions (FGDs) and KIs were developed based on these and these are shown in Annex 1. The list of all stakeholders consulted is appended as Annex 3. Furthermore, one study team member attended the ILO Value Chain Development Training Workshop in Livingstone from 5th to 9th May 2014 during which time the soybean and fish value chains were used for practical demonstrations/analysis with participants reflecting on real value chain experiences which also formed an important input in the analysis of this study. The list of participants in this workshop is appended as Annex 4.

2.2 Data Analysis and Reporting

Quantitative data in the nationally representative databases was analysed using the Statistical Package for the Social Sciences (SPSS) while qualitative data was analysed for content, and where necessary was used for triangulation as well as to complement results from quantitative data analysis. The rest of the report discusses study findings starting from the demand and supply analysis of soybeans at the international, regional and national levels as Chapter 3. This is followed by an analysis of the soybean market system in Zambia in Chapter 4, identification of key opportunities for youth participation in Chapter 5, potential for rural food and nutrition security in Chapter 6 and Conclusions and recommendations in Chapter 7.

Page 17

3.0 DEMAND AND SUPPLY ANALYSIS

3.1 International

Soybean is an important crop with a well-established and growing global market. Global production was over 250 million metric tonnes (MMT) in 2010, rising at a compound annual growth rate (CAGR) of 4.4% between 1991 and 2010, while area harvested over the period grew at a CAGR of 3.2% (AECOM, 2011). Soybean comprises about 54% of the world’s total oilseed production; soybean meal dominates the international protein meal market and soybean oil is second after palm oil in the international vegetable oil market (Ibid). There is also a growing market for human consumption of processed soybeans, such as maize-soybean blend, which offers a low-cost source of protein. The African Centre for Economic Transformation1 (ACET, 2013) estimates that compared with other processed oilseeds, soybeans dominates the meal market, with a 77% share of traded volumes.

The top three soybeans producing countries in the world are the United States (US), Brazil and Argentina accounting together for 80% of the total world production. The top three ranking world consumers are the US, China and Europe together accounting for 61% of the total world consumption (AECOM, 2011).

Although only a fourth major producer of raw soybeans, China is a major processor in the value chain, growing faster than any other major soybean crushing market. This partly reflects moves by major global processors such as Cargill and regional Chinese players to shift global crushing capacity from the US and EU to China (ACET, 2013). Figure 1 shows the world trends in soybeans production and consumption in the last 40 years or so.

Figure 1: World Soybeans Production and Consumption Trends

350

300

250

200

150 Production Consumption 100 Ending Stocks 50

Soybeans quantity tonnes) (millionquantity Soybeans meteri 0 1975/76 1977/78 1979/80 1981/82 1983/84 1985/86 1987/88 1989/90 1991/92 1993/94 1995/96 1997/98 1999/00 2001/02 2003/04 2005/06 2007/08 2009/10 2011/12 2013/14 Year

Source: http://www.farmdoc.illinois.edu/marketing/supply_demand/SourceOfData_wbean.htm2

1 Found at www.acetforafrica.org 2 The data on these files consist of the statistical tables found in the FAS's Production, Supply, and Distribution (PS&D) database. The database contains the official data on world production, stocks, trade, and consumption of major agricultural commodities for the U.S. Department of Agriculture. It includes most of the major agricultural commodities and countries, although country and time

Page 18

The rapid growth in global soybean production and demand is expected to continue as Asian markets continue to increase demand for soybean (driven by China) and the increase of soybean oil for biodiesel production continues (particularly in the US). Sustained demand increases are expected for soybeans for animal feed, vegetable oil, and biodiesel, with a projected growth of 60% by 2025. In 2005, soybean oil accounted for 92% of the 250 million litres of biodiesel made in the US, a recent use that is bound to grow as Americans turn to biofuels to replace imported oil. Similarly, 59% of Brazilian biodiesel came from soybeans (World Watch Institute, 20053). For potential African processors, the key competitors for the domestic African market will continue to be imports from the US, Brazil, and Argentina and recently Asia, while export markets will remain difficult to access beyond niche opportunities, such as non- genetically modified (GMO) beans and meal (ACET, 2013).

3.2 Regional

Although Africa is a net importer of both soybean and processed soybean products, it has the capacity to produce substantial soybean volumes. In the global soybean industry, Sub-Saharan Africa (SSA) remains a small player, accounting for less than 0.7% of global production in 2008 (ACET, 2013). Soybean is mainly a crop for processing rather than for consuming raw or directly cooked and imports from key producers such as Brazil, Argentina, and the US can serve African markets at a cost below the local cost of production, both of which hinder the uptake of a domestic soybean industry. However, soybean production in SSA has been growing slightly faster than global production, at 4.0% a year over 2004–08, with South Africa leading growth in percentage terms and Nigeria contributing the greatest absolute growth (Ibid). Still, Africa’s share remains inconsequential, at less than 1%. South Africa’s relatively high soybean production in SSA reflects its highly developed agro-processing sector (with substantial poultry production), and the Country is a target export market for regional producers like Zambia and Zimbabwe. Nigeria, Uganda, and Zambia also produce substantial amounts of soybean, with the poultry sector playing a similar role in driving demand. In these markets, processing is typically performed by animal feed and livestock producers, rather than by general oilseed processors.

Demand for soybeans in the Region is dominated by the poultry industry which uses both low fat cake and full fat cake as an important source of feed. The pork, dairy and aquaculture industries also use soybean cake as a source of feed. Soybean demand for human consumption is usually in the form of flavoured textured vegetable protein (TVP) though volumes demanded are still very low. According to AECOM (2011) total soybeans demand in the Region in 2008 was 1.5 MMT of which only 0.1 MMT was TVP. Several companies in the Region produce TVP products and demand is growing on the back of increased consumer acceptance and reasonable protein price points.

A far greater use of soybean for human consumption is for Corn Soya Blend (CSB), driven by the United Nations International Children Emergency Fund (UNICEF) and World Food Programme (WFP) purchases. This normally forms part of feeding programmes and is supplied to vulnerable groupings such as children, lactating women and the infirm. In South Africa, around 600 metric tonnes (MT) of CSB is produced monthly and is comprised of 75% maize, 24% extruded soybean and vitamins. CSB operations exist in Zambia (3), Malawi (4), Zimbabwe (1) and Mozambique (1) (Ibid).

coverage differs considerably among commodities. The USDA Foreign Agricultural Service (FAS)maintains the database. The data are reviewed and updated regularly. Updates are from the World Agricultural Supply and Demand Estimates. 3 www.worldwatch.org/node/5442

Page 19

Demand for soybean, cake, and oil is growing rapidly across the Region, driven largely by growth in demand from the poultry sector and, to a lesser extent, human consumption in such markets as Malawi and Nigeria. AECOM (2011) estimates that demand in the Southern African region is expected to grow to 3.5 MMT by 2020 with South Africa continuing to dominate demand. Growth will be attributed to demand for soybean cake by the poultry industry, which is expected to more than double in all countries in the Region. The growth in poultry demand is itself driven by the increased demand for meat, as incomes rise and urbanization intensifies. As poultry is typically the cheapest meat available, it will benefit quickly from increased meat consumption. Soybean will also benefit from this expanded demand as it has no natural competitors as a source of protein in poultry feed; both sunflower and cotton cake tend to be too fibrous and low in protein. Demand from piggeries, aquaculture and human consumption will also grow, but from a much lower base (Ibid).

Demand for soybean oil will grow more slowly due to increased competition from palm oil. As palm oil is considerably cheaper than soybean oil (by over 20% in some countries), it could significantly reduce demand for soybean oil. As standalone processors must be able to sell both the soybean meal and oil to be profitable, this decline in soybean oil demand would, in the long term, damage their profitability and could reduce their willingness to process soybeans. However, there is already sufficient excess demand for soybean oil in most countries in the Region to absorb the increased soybean oil that will result from the increased soybean processed to meet the demand for soybean cake over the next 10 years, even as palm oil demand grows (Ibid).

The Region is a significant net importer of soybean products, importing over 1 MMT per annum of soybean equivalent in soybean cake and a similar amount in soybean oil. South Africa is the largest net importer, importing over 950,000 MT of soybean equivalent soybean cake and 750,000 MT of soybean equivalent in soybean oil (or ~ 90% of demand). Zimbabwe (about 30,000 MT of soybean equivalent), Mozambique (about 25,000 MT) and DRC (about 10,000 MT) also import large volumes of soybean cake.

3.3 National

Like Nigeria, Zambia is a significant player in soybean production and processing, with demand driven mainly by a fast-growing poultry sector. The Country’s soybeans production has increased fivefold from 42,000 MT in 2003 to between 261,063 and 214,179 MT in the past two seasons as shown in Table 1. During the period, commercial farmers accounted for between 77% and 93% of the total production with small-scale or smallholder farmers accounting for rest. In Zambia, smallholder farmers are those cultivating a total area of under 20 Ha while large-scale commercial farmers are those either cultivating larger areas or those that are largely commercialised in their operations. The growth in soybeans production has largely been driven by growth in area cultivated as demonstrated in Figure 2.

As of 2010, Zambia was largely self-sufficient in soybean production importing only 2% of its total requirements which were largely demanded for animal feed (89%), while human consumption, in forms such as soy chunks and soy products such as Yummy Soy, accounted for the remaining 11%. This sector is fast-growing, and is expected to grow by 8% a year over the medium term to 2020 (ACET, 2013).

According to TechnoServe (2012), Zambia by 2011 imported an average of 11,200 MT of soy oil and 25,000 MT of soya-oil cake and became a net importer of soybeans/products. The current estimated soybean demand and supply is shown in Table 2. It has more than enough installed soybeans processing capacity to supply all its edible oils requirements with its installed processing capacity of more than 161,000 MT of refined edible oils which corresponds with a crushing capacity of 375,000 MT of soybeans

Page 20 per year. Zambia has a national edible oils requirement of 120,000 MT per year. Despite having sufficient capacity, almost 70 percent of its national edible oils requirement is met through imports (Chisanga and Sitko, 2013). Locally producing and meeting the soybeans processing capacity would also meet the local feed industry demand for soybeans.

Table 1: Soybeans Production, area planted and yields: 2003-2014

Year Production (MT) % By smallholders Area planted (Ha) 2003 42,000 18 17,400 2004 55,000 15 33,200 2005 90,000 21 65,200 2006 58,000 23 44,000 2007 55,000 17 38,900 2008 58,000 27 32,400 2009 119,000 22 64,700 2010 111,888 17 62,300 2011 116,539 16 61,400 2012 203,038 7 84,800 2013 261,063 14 121,350 2014 214,179 20 116,515 Source: MAL/CSO Crop Forecast Surveys

Figure 2: Trends in Zambia soybeans production and total area planted

300,000 140,000

250,000 120,000 100,000 200,000 80,000 150,000 60,000 100,000

Production (MT) 40,000 Area Area planted (Ha)

50,000 20,000

- - 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Year

Total pProduction (MT) Total area planted (Ha)

Source: MAL/CSO Crop Forecast Surveys

Page 21

Table 2: Estimated Zambia Soybeans Demand and Supply

Soybeans demand (MT) Poultry feed (TechnoServe, 2012) 120,000 Other livestock feed (4:1 ratio with poultry feed) (TechnoServe, 2012) 30,000 Crushed locally for cooking oil (Chisanga and Sitko, 2013) 164,529 Exports Soybeans (CSO Trade Database) 2,475 Cake (CSO Trade Database) 9,918 Oil (CSO Trade Database) 56 Total 326,978

Soybeans supply (MT) Local production (CFS, 2013) 203,038 Imports Soybeans (CSO Trade Database) 505 Cake (TechnoServe, 2012) 34,722 Oil (TechnoServe, 2012) 63,789 Total 302,054 Source: As indicated and authors’ computations

Currently the demand for soybeans to fulfill the requirements of the livestock feed industries (dominated by poultry) in Zambia exceeds supply. Demand is expected to continue to grow at least in line with historic increases in global demand for soybeans. If all vegetable oil imports into Zambia can successfully and profitably be replaced by oil generated from locally produced and processed soybeans, demand would equate to approximately 320,900 MT of soybeans.

All in all, the Zambian soybean sector appears positioned for growth. Given its location, Zambia can export soybean and processed soybean products to regional markets like South Africa and Zimbabwe, especially given the exclusive use of non-genetically modified strains. Most Zambian land with agricultural potential is still uncultivated and well suited to soybean production, and the more than adequate installed processing facilities appear to confirm the opportunity. In 2020, the Poultry Association of Zambia (PAZ) will need 290,000 MT of soybeans to be produced to satisfy the feed requirement for its poultry producing members (TechnoServe, 2012).

Page 22

4.0 FUNCTIONING OF THE MARKET SYSTEM IN ZAMBIA

4.1 Mapping the Value Chain

The main functions of the soybean value chain identified in the study started from input supply flowing through to production, aggregating and marketing, processing, wholesaling, retailing and consumption. Though not included in the schematic illustration of the value chain map in Figure 34, it is recognised that quite a number of inputs in the chain especially chemicals are imported before being supplied by input suppliers to the producers. The numbers of actors at each function of the value chain are large in most cases and these together with the constraints, opportunities and supporting institutions which may reflect policy/enabling environment issues as well provision of business development and other support services, are discussed in the appropriate section of chapter 4.2 which discusses the details of each function of the value chain.

Figure 3: Zambia Soybean Value Chain Map

The key indicator of the gross margin from processing soybean and other oilseeds is the crush spread, or the difference between the combined sales value of processed soybean (the weighted average price per MT for soybean oil and cake, with weights determined by the typical mix of oil, cake, and waste produced per MT of soybean input) and the input cost of raw soybean. This is also known as the gross processing margin. Table 3 provides an example of a soybean processor with a gross processing margin of 18%. However, gross margins for soybean processors can vary across the harvesting cycle and across regions.

Soybean Value Chain Map-2 4 An MS Power Point Version of the map is embedded here

Page 23

Table 3: Breakdown of Value Capture by Stage of Soybean Processing

Value chain stage Percentage value capture Production 13 Opportunity cost of labour 67 Margin 2 Farm gate price 82 Crush Processing costs 3 spread (18%) Crush margin 16 Total revenue 100 Cake 51 Oil 49 Adapted from ACET, 2013

4.2 Details of the Market System

4.2.1 Policy/Enabling Environment

Soybean production and value-addition has primarily been driven by two main policy issues, namely: - nutrition and crop diversification. Government’s concern to fight malnutrition, especially among children, had been the main driver to promote the production and consumption of soybeans in Zambia. The Ministry of Health, led by the National Food and Nutrition Commission (NFNC), also supported by the Ministry of Agriculture and Livestock (MAL), spear-headed the policy campaign for the production and utilization of soybeans. NFNC was initially involved in promotion of soybeans processing (to promote consumption in fighting malnutrition) by research in the removal of the unpleasant odour and improving the shelf-life of soybean products. The main soybean product that was promoted was High Energy Protein Supplements (HEPS). Processing was largely undertaken at household level initially involving mostly women, and later on men were involved in technology and market development. Currently this policy drive (to fight malnutrition) has slowed down with the taking up of the processing initiative by the private sector.

Overall, public sector attention over the last few years has leaned heavily towards promoting maize production, with the great share of public sectors’ spending on agriculture being on just this one crop through input subsidies and provision of market. This has had unfavourable/negative implications on other crops. Most smallholder farmers will prioritise maize production to other crops because of existing incentives from government. On the other hand, the uncertainty created by government participation in the maize sector has resulted into many commercial farmers moving into other cash crops such as wheat and soybeans which they grow in rotation. Unclear and unpredictable agricultural policy framework can negatively affect continued growth in private sector investment into soybean production and processing. However, MAL has continued the promotion of soybean value addition by training smallholder farmers, mostly women and youth, in processing soybeans (at small scale levels) to produce various food staffs such as flour, snacks, relishes, fritters etc. Some books/booklets have been produced on how to prepare traditional food stuffs using soy beans. The current policy driver for soybeans value chain development from the agricultural sector’s perspective is crop diversification to promote food and nutrition security, and income generation at both small and large scale levels.

Page 24

However, the soybean sector faces challenges in delivering viable financial returns. Best-in-class soybean cultivation by commercial farmers appears to be only marginally attractive, with farm gate prices of $350/MT, almost the same as the breakeven price of $349. And smallholder farmers are unable to achieve attractive returns, perceiving soybean to be a more risky crop than maize, which is given a guaranteed price by the Government’s Food Reserve Agency (FRA).

The Government keeps tight control over import and export permits, such that only a few traders can trade internationally. Traders and processors are thus taking caution when developing import and export strategies, often resulting in less competitive exports as supply cannot be guaranteed.

A recent study of Zambia’s agriculture and food security policy framework highlights a number of issues associated with low levels of accountability and predictability on the part of the Government (Martin and Chileshe, 2014).

Though agriculture development has been recognised as key to addressing poverty especially in rural areas, there is still no comprehensive policy framework within which smallholder farmers can be supported towards greater commercialisation, competitiveness and productivity that produces results such as asset building and sustained income and food security. Most efforts have been built around development projects/programmes and in a fragmented fashion. The recently launched National Agriculture Investment Plan (NAIP) which is intended to enable the Country implement the Comprehensive Africa Agriculture Development Plan (CAADP) presents a significant opportunity to address some of the major issues affecting agriculture (from issues of policy predictability to low infrastructure investment). However, what is yet to be developed is a detailed work plan that provides implementation details such as timeframes and specific activities to be undertaken by the public, private and development sectors. While great emphasis is on private sector-led agricultural development, specific themes such as commercialisation of smallholder agriculture and youth empowerment need to be further developed within the detailed work plan.

Public sector support for agricultural value chain financing also lacks a comprehensive framework within which different players can participate. Even within the public sector, it is difficult to understand how the roles of institutions such as Citizens’ Economic Empowerment Commission (CEEC), National Savings and Credit Savings Bank (NATSAVE), Development Bank of Zambia (DBZ) are working towards achieving commonly-held public sector goals.

The “Farming as a Business” (FAB) toolkit (published 2008) developed under the Agriculture Support Programme (ASP) is probably the most significant attempt to influence smallholder farmers towards commercialisation. This toolkit remains largely underutilised in smallholder agriculture development. One of the major criticisms of this tool is that it does not go far enough in addressing issues at the level of mind-set and cultural practices amongst smallholders.

Collectivism amongst smallholder farmers has been proven to be effective in successful rural agricultural development. But the performance of cooperatives (as the main institution for promoting collectivism) in Zambia has been poor, with the structure having been mainly used for accessing government subsidies. The Zambia National Farmers Union (ZNFU) has attempted to fill the gap by incorporating smallholder farmers within its constituency but this remains problematic because of the breadth of its membership and its history as a body for large scale commercial farmers.

Interventions in a particular value chain (such as the ILOs RYEP) can play an important role is providing a platform around which some of the issues raised above could be addressed. This could include facilitating stakeholder dialogue, development of specific input that informs policy development, and the

Page 25 championing of implementation of specific components of initiatives such as those contained in CAADP and NAIP. Ensuring that the voices of youths are heard is itself a major role.

4.2.2 Inputs Supply

The main inputs for soybean production are seed, fertilizers and agro-chemicals like inoculum and herbicides. Soybean seed supply is almost exclusively based on domestic production. In 2012 for example, only 290 MT was imported and none in 2010 and 2011 according to trade data from the Central Statistical Office (CSO). The main sources of imported seed are South Africa and Malawi. Most of the soybean seed varieties used in Zambia are open pollinated which can be recycled reducing the frequency of new seed being bought (Lubungu et al. 2013). The high recycling rates make soybean seed production less attractive among the seed companies compared to crops with higher demand for new seed like maize. Seed companies currently supplying soybean seed to the Zambian market include Zamseed, Pannar, MRI, Kamano, Seedco and Stewards global. Seed companies also engage farmers or farmer associations through contract farming to multiply seed. Public sector involvement in seed supply is through the Zambia Agriculture Research Institute (ZARI) whose production is limited due to insufficient capacity to multiply seed. Both ZARI and the seed companies are continually involved in research and development activities in an effort to increase productivity of seed available to farmers with support from international institutions like the International Institute for Tropical Agriculture (IITA).

Companies supplying agro-chemicals include Amiran Limited, CropChem Limited, Agro-Smart Services Limited, ATS Agrochemicals, Agrifocus and Cropserve Limited. The chemicals supplied by most of these companies can also be found in various agro-dealer shops around the Country. According to Lubungu et al. (2013), ZARI is the sole producer of inoculum in Zambia and supplies it in form of liquid and dehydrated powder. Domestic production is supplemented by imports such as Soya Grow from South Africa (TechnoServe, 2011). Key suppliers of fertilizer are Nitrogen Chemicals of Zambia (NCZ), Greenbelt Fertilizers (GBF), Export Trading Group (ETG), Nyiombo, Sasol and Omnia Fertilizers. Lime is also available from local producers like Ndola lime and Turtle Agro Limited.

4.2.2.1 Smallholder Farmer Access to Inputs

Smallholder farmers in Zambia are classified as those that cultivate a total of less than 20 Ha. Their access to inputs for soybeans is through agro-dealerships that are spread throughout most of the Country with higher concentrations around the districts business centres. The level and types of seeds stocked for soybean is demand-driven, as such agro-dealerships in higher production areas like Chipata and Lundazi had a wider variety than low production areas that reported difficulties in finding seed. Even in high production areas, agro-dealers are reluctant to increase stocks of seed due to low and inconsistent demand from the farmers (mainly as a result of recycling). Unlike maize, there are currently no commission-based opportunities for agro-dealers to sell seed on behalf of seed companies in rural areas. The seed is bought on cash basis from the companies leaving the agro-dealers to bear the risk of loss in potential revenue from unsold stocks in times of lower than anticipated demand. As such, the agro- dealers try to be as conservative as possible by only stocking the quantities that they are sure will be bought. Certified seed is available in as small as 2kg up to 25kgs packages, prices range between ZMW205 and ZMW275 per 25kg bag while powdered inoculum costs ZMW40 to ZMW45 per 200g pack. For the rural and most remote parts of the Country, input access reduces the further the farmer is located from the centre of the district due to lack of agro-dealership outlets within farming communities. MAL is

Page 26 currently working with development partners and Non-Governmental Organisations (NGOs) in training community based agro-dealers in entrepreneurial and business management skills.

The dynamics of seed and complementary input access varies substantially depending on the farmer’s scale of production. Table 4 summarizes the main sources of soybean seed for the 2011/12 agricultural season among smallholder farmers. Most of the farmers (87%) use recycled seed from previous harvests. The farmers are usually cash constrained at planting time and give priority to maize inputs when allocating the little resources they have for new seed ending up recycling for soybeans (and that there is little loss of hybrid vigour in recycling soybeans). With the exception of the 8% who bought through various outlets, the rest of the farmers got seed on non-cash basis throughout-grower schemes, extension officers, research institutions, social welfare assistance packages and NGOs. Sometimes seed companies, NGOs and research institutions identify Lead Farmers to manage demonstration plots with free inputs.

Table 4: Main sources of 2011/12 soybean seed among smallholder farmers

Main source of seed Number of Proportion of households households

Own harvest 32,821 58.5 Another farmer 10,628 19.0 Friends or relatives 5,254 9.4 Private retailer/agro-dealer at boma 4,003 7.1 Out-grower 710 1.3 Seed company 662 1.2 COMACO (community Markets for Conservation) 547 1.0 Cooperative/farmer group 448 0.8 Local seed producer 214 0.4 Private retailer/agro-dealer outside boma 161 0.3 Conservation Farming Unit (CFU) 154 0.3 Government Food Security Pack 97 0.2 Government Farmer Input Support Program 87 0.2 MAL extension worker 135 0.2 Other NGO 31 0.1 ZARI (Zambia Agriculture Research Institute) 42 0.1 Other sources 41 0.1 Faith-based organization/church 29 0.1 Total 56,064 100 Source: CSO/MAL/IAPRI RALS 2012

Some cotton farmers, especially in Eastern Province, also receive soybean inputs on credit from cotton companies like Cargill and NWK Agri Services (formerly Dunavant). These farmers who are linked to buyers usually receive packs of seed and the required inoculum. The downside of such arrangements is that farmers do not have much of choice of varieties that would best meet their requirements. They identify the seed varieties using the names of the suppliers e.g. “COMACO seed” “Cargill seed” making it difficult for them to keep track of what varieties have performed best for them. Outside existing linkages, access to inoculum is cash-based and hindered by limited availability in agro-dealerships. Cash constraints at the beginning of the agricultural season are quite wide spread especially among rural based farmers and have been identified by several stakeholders as key intervention points to increase use of improved inputs.

Page 27

Zambia National Farmers’ Union (ZNFU) has an input credit facility, LIMA Credit Scheme, that seeks to address this among its members by providing inputs with an initial payment of 50% required from the borrower, while the rest is paid back at the end of the production season. Soybean is one of the crops supported under this scheme. The Scheme helps the farmers to spread the few resources they have at the beginning of the season enabling them to access more inputs. However, the Scheme is exclusive to members of district farmer associations that are affiliated to ZNFU and inaccessible to poorer farmers who have challenges in meeting membership fee requirements and loan initial payments. Credit access is also possible through group lending facilities available from commercial banks such as NATSAVE.

4.2.2.2 Large Scale/ Commercial Farmer Access to Inputs

Commercial/Large Scale farmers are those who either cultivate a total area of 20 Ha and above or are highly commercialised based on their average annual turnover. These farmers’ access to seed and complementary inputs is less of an issue as compared to smallholder farmers in rural areas. Access to most inputs is through seed company outlets and agents, agro-chemical companies and agro-dealers. Because of the higher demand for inputs in the peri-urban areas where most emergent and commercial farmers are located, there is a wider variety of seeds and types of inoculum. The large number of sellers also results in slighter lower prices of seed, for example in Mkushi, seed prices for the 2013/14 season ranged between ZMW195 to ZMW235 per 25kg. Agro-dealers in such areas also benefit from support in the form of linkages to agro-chemical suppliers like ATS Agrochemicals through NGO initiatives/collaborations like Musika Development Initiatives.

4.2.2.3 Analysis of Constraints and Opportunities

The soybeans input supply system is quite well developed for the large scale commercials farmers through the private sector but that of the smallholder farmers is wrought with constraints which hinge on mainly under development of the agro-dealer network compounded by poor seed system management. Ideally smallholder farmers needed to largely plant improved varieties, apply inoculum and then could recycle this seed for about three years without it losing vigour and productivity. Planting of local recycled seed leads to low yields of about 0.7 to 0.8 MT/ha as compared to potential yields of 2 MT/ha. Though soybeans does not require artificial nitrogen fertilisation, it requires inoculation of the seed to enable the plants to be able to manufacture own nitrogen needs but smallholder farmers rarely apply this due to lack of knowledge, availability, cost and/or storage challenges (particularly with liquid inoculum). Lack of awareness on the need to apply inoculum in soybean growing can be extended to agro-dealers as well.

There are, therefore, opportunities for expanding existing and new youth engagement in soybeans seed and inoculum supply businesses following appropriate training and support with either working capital and/or linkages to input suppliers to access the required seed and inoculum for onward selling to smallholder farmers. Opportunities also exist for the private sector to partner with ZARI in the production and distribution of inoculum.

Page 28

4.2.3 Production

4.2.3.1 Smallholder Soybeans Production

Up until the 1980s, soybean production was mostly undertaken by commercial farmers. From the 1990s, smallholder production grew rapidly such that about 10% of total production in 2007 was supplied by smallholder farmers (Keyser, 2007). Smallholder production has continued to grow and is expected to reach 42,718MT (20% of national production) for the 2013/14 agricultural season. Most of the commercial production is concentrated around Central, Lusaka, Copperbelt and Southern Provinces. Smallholder production is dotted around the country with Central Province producing the highest followed by Eastern Province (Figure 44).

Figure 4: Smallholder soybean production by province, 2010/11 agricultural season

18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 Production in MT 2,000 -

Province

Source: CSO/MALCFS, 2014

Input use in soybean production is highly dependent on availability of resources to access the inputs and the importance of soybean in the farmer’s cropping portfolio/system. The most important crop among smallholder farmer remains maize for household food security and that it has a more established and relatively stable market. The most important competitors to soybeans for resources are cotton, tobacco, sunflower and groundnuts because of assured markets (for tobacco and cotton) and household food uses (sunflower and groundnuts). Soybean is still considered a relatively new crop among the smallholder farmers whose profitability is not well known (although, some smallholders say that soybeans is more profitable compared to maize). Soybean is seen as an advantageous crop among growers because of the early market season which coincides with the beginning of the school term when cash needs are high. The most important cost of production among smallholder farmers is seed which accounts for about 40% of total costs. Improved access to higher yielding seed varieties could result in an increase in financial returns in soybean production that would make it more profitable and attractive to non-growers. Actual yields among smallholder farmers are reported to be between 0.8MT and 2MT per hectare. There is also a low use of inoculum among smallholder farmers due lack of knowledge on the benefits and how to apply Inoculum: even amongst the knowledgeable, its use is impeded by limited access (Lubungu et al., 2013). Smallholder soybean production is rain-fed with little or no fertilizer applied unless residual fertilizers are available in the soil when grown in rotation with maize and/or cotton. This is partly as a result of farmer

Page 29 perceptions that soybean does not require fertilizers. Table 5 summarizes the levels of production, yield, seed use and marketing of soybeans by age group smallholder farmers.

Table 5: Soybean production and farmer characteristics by age group

Age category Youth headed Middle aged Old headed (55 Total (up to 35 years) headed (36 to years and Characteristic 54) above) %Female headed household 12 21 20 18 Mean Ha planted to soybeans 0.39 0.45 0.51 0.44 Mean Ha harvested 0.35 0.43 0.48 0.41 % Hh used local variety 78 73 79 76 Kg soybeans harvested 284 392 377 353 Mean soybeans yield (kg/ha) 824 876 813 845 Mean Kg soybeans sales 266 370 370 335 %Household sold soybeans 77 72 76 74 Mean soybeans price (ZMW/Kg) 2.49 2.21 2.29 2.33 Mean distance to point of sale in Km 15 13 25 16 Mean soybeans sales (ZMW) 761 838 971 842 Percent out growers 0.3 1.9 2.5 1.5 Source: CSO/MAL/IAPRI RALS, 2012

On average, each smallholder farmer planted less than half a hectare of soybeans, producing about 350 Kgs. Most of the households sold their soybeans at an average price of ZMW2.33 per Kg. Younger farmers appear to have planted smaller plot sizes and had experienced lower yields5. They also seem, on average, to have sold much closer to their dwelling areas compared to the rest. Commercial production is both rain-fed and irrigated in rotation with wheat. Yields are higher because of consistent use of improved seed, fertilizers, inoculum, pesticides, and herbicides and timely planting.

With regard to performance based on the category of seed, smallholders who use recycled local seed planted less soybeans areas, harvested less, achieved low yields and sold fewer quantities as is shown in Table 6. Smallholder farmers who planted improved seed from out growers had the largest proportion of farmers selling their crop at 95% compared to an average of 74%.

Table 6: Smallholder soybean performance indicator in 2010/11 season by seed variety category

Seed variety category Local Improved out Improved other Total Indicator recycled grower Ha planted to soybeans 0.39 0.61 0.60 0.44 Kg soybeans harvested 269 547 535 334 Soybeans yield (kg/ha) 834 934 851 839 Kg soybeans sales 254 331 558 321 %Household sold soybeans 75 95 70 74 Source: CSO/MAL/IAPRI RALS, 2012

Generally, extension services have in the recent past been poor or inadequate, especially from the Government. Government Extension staff are poorly financed (operational expenses) to provide adequate extension services: in some cases, Smallholder farmers are charged by Extension Staff to provide the services, although they are meant to be free. Other organisations, however, such as NGOs,

5 Differences not tested statistically.

Page 30

UN Agencies-supported Projects and ZNFU have been providing extension services (although ZNFU provides services only to its members).

4.2.3.1 Large Scale Commercial Soybeans Production

Soybeans production by large scale commercial farmers is over three times higher at present than it was in 2003 according to CFS figures. An assessment of commercial farmers’ soybeans production by Chisanga and Sitko (2013) revealed that out of an average area under crops of 3,966 hectares per farmer, 2,558 hectares (64.5%) is under soybeans leaving about 35.5 per cent for other crops. The predominance of soybean production in commercial farming systems is likely the result of a combination of factors. On one hand, demand growth for edible oils and stock feed industries (largely poultry) has spurred production growth. On the other hand, many farmers have shifted out of maize production due to poor maize market conditions resulting from high levels of government intervention (viewed as interference) in the maize markets.

Chisanga and Sitko (2013) further observed that average production per farmer has increased by about 33.5 per cent from 2007/8 agricultural season to 2012/3 agricultural season (the last five years). Average area planted of soybeans per farmer has risen by an average of 13% per annum over the same period, while yields have risen by an average of 10 per cent. The drivers of the observed growth in soybeans production include the expansions in the soybeans crushing capacity in Zambia and the rise in the price. There are also a number of larger farmers and corporate farming entities that have made green field investments in soybeans in the last five years, which is boosting production.

4.2.3.2 Harvesting and Threshing

Development of non-shattering soybean seed varieties has helped remove one of the major challenges that smallholder farmers previously faced after crop maturity. However, the nature of the soybean plant (prickly when dry) still creates discomfort especially after prolonged exposure from hand-harvesting a large field. This may contribute to farmers being less inclined to expand the size of their fields. Soybean harvesting and threshing machine 4LZ-2 Almost all smallholder farmers harvest soybeans by hand by either 2058 with 90HP engine (Source: uprooting the entire plant or using a sickle to cut off the section that http://www.alibaba.com/showroom/soyb ean-threshing-machine.html is above ground. The latter is encouraged so that the roots remain in the ground to fertilise the soil. It is not uncommon also that, among smallholder farmers children (“youth”) are also engaged in the harvesting of soybeans. Harvesting technology has existed for decades now. However, the shift towards large scale agriculture in many parts of the developed world may affect access to technologies that are appropriate to small scale farming. Large scale commercial farmers harvest and thresh their soybeans using machinery such as shown in the insert picture, costing between $15,000 and $20,000 each.

Page 31

4.2.3.3 Analysis of Gross Margins

Commercial farmer net profits (gross margin adjusted for fixed costs and interest on investment) are projected at ZMW619 per hectare if soybean price is ZMW2.6 per hectare (see Table 7). A farmer can still break-even if yields and price declined to 1.6MT per hectare and ZMW2.26, respectively with correct input application and good management practices. For smallholder production, soybean production is quite profitable even with below recommended levels of inoculum and fertilizers.

Participatory gross margin analysis of different farmer-managed demonstration plots with varying fertilizer and inoculant levels meant to show farmers how to access gross margins under IITA and the International Maize and Wheat Improvement Centre’s (CIMMYT) Sustainable Intensification of Maize- Legume systems (SIMLEZA) in Lundazi and Katete assessed profitability under four scenarios: plain seed; inoculated seed only; plain seed with fertilizer; and inoculated seed with fertilizer. The most profitable was inoculated seed with fertilizer with gross margins of ZMW376 per hectare. The most beneficial input per hectare was inoculum resulting in a net increase of ZMW53/gram in the presence of fertilizer and ZMW21/gram in the absence of fertilizers. Fertilizer use was only profitable when used in combination with inoculum.

Table 7: Gross margin analysis for Emerging/Commercial Production

Item Unit Rate/Ha Unit Price (ZMW) Amount(ZMW/Ha) Revenue Soya grain Kg 2,000 2.6 5,200 Total Revenue 5,200 Variable Costs Seed Kg 100 8 800 Comp D Kg 100 4.1 410 Soy Flow Llt/100kg 0.4 140 56 Round up Lt/Ha 2 32.5 65 Endosulphan Lt/Ha 0.25 60 15 Packing Bags 40 2 80 Ploughing 400 Labour Man days 70 19.03 1,332 Transport (distance 75km) MT 150 1.2 180 TVC 3,338 Interest % of TVC 0.15 3,253 488 TVC + INTEREST 3,826 Gross Margins 1,374 Fixed Cost % of TVC + Interest 0.2 3,774 755 Total Costs 4,581 Profit (+return) 619 Breakeven price ZMW/ton 2,290 Break even yield MT/Ha 1.64 Source: Mkushi-Zambia National Farmers’ Union, 2014

Page 32

4.2.3.4 Analysis of Constraints and Opportunities

The main constraints to smallholder farmer soybeans production are limited crop management systems due to limited extension support resulting into low yields, limited or no access to mechanisation (due to high costs) resulting in chronic cultivation of small areas, capital constraints (high lending interest rates and/or collateral requirements by commercial banks), poor post-harvest handling due to lack of facilities and appropriate knowledge, and relatively high input costs (particularly herbicides). Other public sources of capital/finances for smallholders e.g. CEEC and Youth Development Fund are viewed as bureaucratic and/or “political”.

There was an opportunity for acquiring farm machinery and equipment by smallholder farmers, in the last phase of the Farmer Input Support Response Initiative (FISRI) Project’s farm mechanization component, implemented by the Food and Agriculture Organisation of the United Nations (FAO), but funded by the European Union. Some expected beneficiaries viewed it as good but problematic at implementation. The Project component involved three key institutional implementing stakeholders, namely FAO, ZNFU and MAL. MAL had the responsibility of selecting/choosing the beneficiaries, which primarily emphasized membership of a beneficiary to a Cooperative Society and apparently not that the beneficiary was/is actually an active farmer (some members of Cooperatives were said as not actually farmers). Thus the Project/Programme was said not to have performed to beneficiary expectation. It was suggested that it would have been better to select beneficiaries from Farmer Associations and not from Cooperatives.

There are, however, other opportunities to link smallholder farmers with the Conservation Agriculture Scaling Up Project (CASU), successor to FISRI, also implemented by FAO which is promoting sustainable smallholder production systems involving soybean rotations with cereals, among others, and use of conservation farming techniques. This Project is also associated with facilitation of farmer linkages to appropriate inputs. There is also potential for MSME business running land cultivation services among groups of smallholder farmers. With regard to harvesting and threshing, literature shows that small “walk-behind” harvesting and stationary threshing machines may be in production (or may have been in the recent past) in Europe (including Russia) and China, though quality concerns with regard to effectiveness, efficiency and durability have also emerged. A project could play an important facilitative role in ensuring that these are in place. The opportunity described above requires that:  Smallholder farmers are organised in clusters that can be serviced by one harvester and thresher;  Financing is obtained for purchase of the item; and  Expertise is developed with regard to machine operation, repair and maintenance.

4.2.4 Aggregation and Marketing

4.2.4.1 Aggregation and Main Marketing Channels from Smallholder Farmers

Aggregation involves the accumulation of volumes to a scale that can be economically fed into the formal market system. This is especially necessary in the current scenario where tens of thousands of smallholder farmers produce relatively small quantities of soybean each (about half a ton each). Though soy crop marketing runs from May to July, much of the crop is usually mopped up from smallholder farmers within four to six weeks. The price is often higher at the start of the season (between ZMW1.50 and ZMW2.80 per Kg, depending on distance from the market) as large buyers seek to meet

Page 33 their quotas with processors. As these quotas are close to being met, the price starts to drop and can fall by as much as 30-40% by the time the product runs out. The price will be lower if the produce is sold to primary buyers who have to sell to a larger aggregator, who in turn sells to the processor or exporter. Most farmers will be under pressure to sell and meet various domestic needs, and so are not able to hold back to wait for a better price. Lack of a reliable source of market information makes it difficult to make well-informed decisions regarding who to sell to and when. Market information for smallholder farmers is generally limited though ZNFU provides mobile phone SMS service (ZNFU 4455) which links farmers, traders and processors by providing buyer contact details for ten (10) major crops and four (4) livestock, country wide.

Soybean aggregation takes place at different levels and involves different players. At village level, bulking points are identified and used to create volumes that can be collected in a more economical way for onward transportation to district centres. Sometimes it is the impassable roads that necessitate movement of the commodity to more accessible points. This is done by the farmers themselves and also by individual smaller traders that move through the villages and buy from individual households. At this level, the basic means of transport for most places will be the ox-pulled carts that are able to carry around 200 to 500 kg at a time. Light trucks (commonly referred to as “Canters” because of the common model of Mitsubishi trucks in rural areas) with capacity typically ranging from 1.5 to 3.5 tonnes are used to collect from the bulking points, or from individual households that have the volumes and/or are accessible, and further aggregate at the district centre or a designated storage shade. These vehicles are often owned by the local farmers and are hired out by other players including fellow farmers and traders. Main buyers of soybeans in 2012/13 included Amatheon Agri (new market entrant) who offered Mumbwa smallholder farmers ZMW2.80/kg soybeans delivered to their premises with Amatheon in turn selling to AFGRI.; Mt Meru in Katuba (Chibombo District) near Lusaka who offered a price of ZMW3.70/kg delivered to their processing plant and Agri Options Limited (AOL) owned by 13 commercial farmers and who bought 75% of produce from Mkushi at about ZMW2.80/kg. The most prominent marketing company Top: Local youth-owned enterprise making ox-pulled carts in Lundazi. found was AFGRI which bought 70,000 MT of soybeans from Bottom: The light truck used to smallholders at ZMW2.40/Kg in Central Province in 2012/13 and is move produce to district centres looking to buying 300,000 MT from the Katete-Petauke area from the 2013/14 crop. AFGRI seems to have a large market for the crop in South Africa. Out-grower companies such as Rainbow Company, Cargill, NWK Agro Services (formally Dunavant), Amatheon Agri, Consolidated Mining Reef (CMR) Farm, Rainbow and Emman Farming Enterprises (EFE) were also found to be engaged in marketing soybeans from smallholder farmers. COMACO also provided production inputs to farmers and purchased about 250 – 450 MT and Profit Plus provided value chain facilitating services as part of the USAID funded Feed the Future Initiative in Eastern Province.

Several local aggregators are also active on the market. A notable one in Chipata is Shifa who was mentioned as a major local buyer. In Mumbwa District, the Mumbwa Agro-Dealers Association (MADA), formed in 2009 (but registered in 2010) begun to participate in soy aggregation and marketing

Page 34 from 2012/13. They secured a fixed-price supply contract with Mt Meru of ZMW2.7/kg. MADA bought the commodity from smallholder farmers at ZMW2.20/Kg giving them a margin of MW0.50/Kg. Transportation cost using hired light trucks to Mt. Meru in Lusaka (about 170km from Mumbwa) cost in the range of ZMW6 to ZMW10 per 50kg bag of soybeans or ZMW1,000 a truck load of 600 bags. The association has submitted a loan application to the Citizen’s Economic Empowerment Commission (CEEC) so they can construct a warehouse and also procure soy processing equipment; were also linked to CETZAM for financing (loans), although this has not materialised. They also want to purchase a sheller so that they can buy the soybeans in pods from smallholder farmers at a much lower price and do the shelling themselves. Larger trucks (over 30 MT) are normally used to move the commodity from rural districts to supply processors such as National Milling, Mt. Meru, Tiger feeds, Luanshya Milling and Mpongwe Milling with some being exported thereafter. These trucks may be hired, though for the case of Lundazi, the trucks are owned by Aliboo, the aggregator. Transporters who deliver other goods and load soybeans on return trips are able to offer lower transport charges. It was also found that a significant amount of trade in soybeans (some of it informal) is taking place across the Zambia-Malawi and the Zambia-D.R. Congo. In the case of trade between Zambia and Malawi, soybean flows in or out depending on the price differences between the two countries. To take advantage of the opportunities for market linkages for sales of soybean products for consumption, Musika Development Initiatives project, for example, also offers marketing services (market linkages) to farmers, either solely or in collaboration with other market players.

4.2.4.2 Main Marketing Channels from Large Scale Commercial Farmers

Commercial farmers sell most of their soybeans to processors whose primary product is cooking oil and soy cake (e.g. Mt Meru, Zamanita) or stock feed manufacturing (e.g. Olympic Milling, National Milling, Tiger Feeds, Nutri Feed, Quality Feeds, Pembe Milling and Ross Maclaude). Through these arrangements, commercial farmers have witnessed a rise in the price of soybeans over the last 5 years, averaging 17% from an average of US$ 483 per tonne in 2008 to about US$ 566 per tonne in 2013.

Some commercial farmers, large scale traders and out-growers export some of the soybeans they produce and buy from smallholders respectively. The main export destinations are Botswana (70%), Malawi (26%) and Angola (3%). Exports of soy cake from processors also take place mainly to Zimbabwe (96%) and DRC (2%).

Large commercial farmers have a clearly defined market that may involve forward contracts (at an average price of US$500/MT) and preferential procurement arrangements. The crop is bulked on farms and moved directly to the processor or a warehouse in readiness for export. The banning of livestock feed export to Zimbabwe and the presence of imported cheaper edible oil products was said to have negatively affected demand (and so price) for soybeans in the last season. Many large scale commercial farmers in places like Mkushi, Mumbwa and Mpongwe are closer to district centres and to relatively good infrastructure. Such proximity and the larger volumes and lower production cost combine to give them a significant competitive advantage when it comes to crop marketing. In Mkushi, for example, 13 commercial farmers have formed (own) a company, Agri-Options Ltd (AOL), and these farmers have a guaranteed markets, as they are bounced to sell their soybeans to AOL. AOL, however, also buys from other farmers, including smallholder farmers, if the owner commercial farmers are unable to meet the requirement.

Page 35

4.2.4.3 Analysis of Constraints and Opportunities

One of the key constraints in soybean marketing is that smallholder farmers and even local smaller aggregators do not often have the benefit of a confirmed market for their produce at the time of production (e.g. through forward contracts, preferential procurement, etc.) as can be the case for their large scale counterparts. This can create uncertainty and affect levels of investment into production and/or aggregation/marketing. Quite often smaller aggregators also struggle with accessing finance to enable them buy the crop from smallholder farmers. Banks will generally request for collateral and many of these players will not be able to put forward the required values. There is also apparently “unfair” competition and “unethical” practices among small aggregators/marketers. Such include cases where some traders offer farmers much higher prices than the prevailing ‘normal’ market price; the use of incorrectly calibrated (tempered with) weighing scales to cheat smallholders farmers; and buying using gallon tins to fill up a 50Kg bag (by volume), which actually end up weighing 60Kg. Other infrastructural service-related constraints include:

 Warehousing facilities are generally not available;  State of rural road infrastructure raises costs of transportation;  Lack of local processing entails that long distances are covered from places like Lundazi, raising transport costs; and  Road transport is generally more expensive compared to rail (which could be used more from Copperbelt but not available for Eastern Province). Opportunities exist for youth to participate in aggregation through the following means:

 Facilitating small scale farmer clustering to increase volumes and negotiating power e.g. WFP Purchase for Progress (P4P);  Support to local agro-dealers (with youth involvement) to enhance their capacity to aggregate and market soy from small scale farmers e.g. WFP’s P4P;  Advocating for establishment of warehouse receipts system e.g. WFP’s P4P;  Owning carts (and even oxen) that they can hire out during the bulking process;  Running enterprises that build, repair and maintain the ox-carts;  Own and manage bulking sites and charge a small fee (with options for payment in kind) for safe keeping of produce until it is collected;  Actively engaging in buying from local producers and acting as aggregators;  Owning and hiring out light trucks for soybean transportation during commodity aggregation;  Establishing mechanical workshops that can maintain, repair and fabricate parts for light trucks, or even act as agents for procurement of the truck and spares;  Facilitating small scale farmer clustering to increase volumes and negotiating power;  Direct market linkage between primary aggregator and final market (e.g. Lusaka, D.R. Congo, Tanzania, RSA) to cut out some of the middle men and improve margins in the value chain; and  Establishment of transport enterprises that are able to mop up produce at sub-district level and bulk for larger players (e.g. AFGRI) to pick up. The need for storage of soybeans will continue to grow with increase in volumes and also as market players begin to watch price changes more closely and sometimes opt to hold back on selling their produce. It will therefore be necessary for interventions within the soybean sector to also consider support for the development of appropriate bulking and storage mechanisms that will help improve the functioning of the commodity value chain.

Page 36

As with other grains, the combined effect of grain moisture content and storage temperature are most critical when looking at warehousing. High readings in these two indicators can accelerate spoilage and also affect seed germination. The high oil content in soybeans makes them more susceptible to spoilage than, for instance, maize. A farmer’s rule of thumb is therefore that soy needs to be two percentage points drier than maize when being stored (apparently, the issue of high moisture content in soybeans has enabled some traders/aggregators/marketers in Mumbwa to ask smallholder farmers to add 2Kg of soybean bought up to July). Close monitoring of growth in production will assist in identification of opportunities for the establishment of storage facilities (including location and size). Implementation of the Agriculture Credit Act will allow for the use of the Warehouse Receipts System to reduce need for farmers to quickly sell their produce in order to access cash. It will in turn also help in stabilising the market, especially with regard to price and commodity flow.

4.2.5 Processing

The Zambia soybean processing sector has five main types of players:

1) Integrated feed manufacturers who produce animal feed and are often vertically integrated into livestock production. Examples include: Zamanita, the former parastatal organization, is owned by Zambeef, and it sells cake to Novatek and also exports cake to Zimbabwe. It has the largest capacity in Zambia, at some 50,000–60,000 MT a year. Quality Commodities, Agri Options, and National Milling Company are also significant players (with 20,000, 12,000, and 12,000 MT of capacity, respectively); 2) Producers cooking oil (refined and crude) and automatically produces soy cake (larger proportion of soybean primary commercial processing), which is either sold or processed e.g. Mt. Meru, AOL, CMR Farms, EFE; 3) Oil producers that refine edible oils are often involved in oilseed crushing, and trade soy cake to other players. Key players include Unified Chemical, which focuses solely on refining both domestic and imported oils (principally from Argentina), and Hi-Protein, a smaller player that refines palm oil and small quantities of soybean oil. Zamanita is also a key player in the refined soybean oil sector, with a 30% market share; 4) Livestock feed producers (not vertically integrated) from bought soy cake, e.g. Novatek, Olympic Milling, National Milling, Tiger Feeds, Nutri Feed, Quality Feeds, Pembe Milling and Ross Maclaude; 5) Processors of human foods directly such as chunks by Seba Foods Ltd.

The Country has more than enough installed capacity to supply all its edible oil requirements with its installed processing capacity of more than 161,000 tonnes of refined edible oils which corresponds with a crushing capacity of 375,000 tonnes of oilseeds per year. Zambia has a national edible oils requirement of 120,000 tonnes per year. Despite having sufficient capacity, almost 70 percent of its national edible oils requirement is met through imports.

In Zambia soybeans is mainly processed into soy chunks, soap, refined cooking oil, unrefined oil, and soy cake which is a major component of livestock feed formulations. Soybeans processing is mainly undertaken by large scale commercial processors, with very little small scale processing taking place which is mainly done at domestic level to produce products for home consumption or incorporating in feed formulation for livestock. Domestic processing is very basic and the resulting main product is soy flour which is used for making porridge or soy cake snacks, and/or soy cake which is used as one of the ingredients for livestock feed.

Page 37

4.2.5.1 Commercial Processing

Processing of soybeans is mainly undertaken by commercial processors who have invested in expensive heavy duty processing equipment. The commercial processors use either solvent extraction method of processing which enables the production of highly refined edible oil or use the extrusion method which produces crude oil which may require further processing or consumed as such. Some of these commercial processors such as Zamanita and CMR Farms are vertically integrated and produce some of the soybeans they process, while also outsourcing some of it from local producers. The majority of the processors however outsource their soybeans stock from all levels of farmers within the Country and import some of it. Table 8 lists the main soybean processors and their primary products from processing.

4.2.5.2 Small Scale and Domestic Processing

Small scale producers of soybeans largely view soybeans as a cash crop to be sold and as such there is very little domestic processing currently being undertaken. The small scale producers of soybeans have some knowledge on how to conduct some basic processing but the practice is very low. These producers are processing it at home to produce soy meal/flour for adding in mealie meal porridge, baking and/or making soy snacks, while other process it for incorporating into formulations for feeding their livestock (particularly the poultry sector).

4.2.5.3 Analysis of Constraints and Opportunities

For small producers of soybeans, technology, including the high cost of equipment, is a major barrier to entry into commercial processing especially for producing products for human consumption other than cooking oil. This is especially the case with the issues around heating (dry steaming or extrusion) of the soybeans. However, there are local equipment manufacturers, such as SARO, UNZA-TDAU and CAMCO, which are able to manufacturer appropriate and relatively cheaper processing equipment for smallholder processors.

One of the key challenges faced by the commercial processors is the high cost of production associated with the use of hydro-electric power which is used to run their processing equipment. In addition to this, some of the processors that have to procure their own soy cake or soybeans for processing into livestock feed also incur high transportation costs due to the high petrol/diesel prices. Soybeans or soy cake is a bulk product and requires the use of huge trucks which travel long distances from their sources to their processing mills.

The greatest opportunity for soybean processing is the presence and growing demand of human and livestock feed, especially the growing poultry industry which is heavily dependent on soybeans as a key ingredient in the poultry feed formulations. Though not well understood or estimated there is evidence of existing market of soybean products for human consumption such as soy milk, chunks, burgers, sausages, hot dogs, mince, polonies etc. through their presence in supermarkets (mainly chain stores) acquired through imports.

Page 38

Table 8: List of soybean processors and their products

Name of Processor Location Soybean based products High Protein Foods Limited Lusaka Soy chunks, HEP6 porridge, refined cooking oil, livestock feed Trade Kings Lusaka Nyama soya, soy chicken fillet7 Quality Commodities Lusaka Soy cake, crude oil Seba Foods (Zambia) Ltd Lusaka Soy chunks COMACO Lundazi Soy chunks, soy milk (yummy soy), soy cake Golden Lay Luanshya Edible raw crude soybeans oil, soy cake Unified Chemicals Lusaka Refined cooking oil (Ole) Agri Options Limited (AOL) Mkushi Crude oil and soy cake Gourock International Ndola Refined cooking oil and soap Zamanita Lusaka Refined cooking oil and soy cake Emman Farming Enterprises (EFE) Masaiti Refined oil, soy cake and Livestock feed Mt. Meru Chibombo Refined cooking oil and soy cake Consolidated Mining Reef (CMR) Farm Kabwe Unrefined oil and Livestock feed National Milling Lusaka Livestock feed and cooking oil Antelope Milling Luanshya Livestock feed Tiger Animal feeds Lusaka Livestock feed Novatek Animal feeds Lusaka Livestock feed Simba Milling Lusaka Livestock feed Olympic Milling Ndola Livestock feed Rose Breeders Copperbelt Livestock feed Perfect Milling Limited Lusaka Livestock feed Acropolis Enterprises Limited Monze Livestock feed Chigayo Animal feed Choma Livestock feed Yielding feeds Limited Lusaka Livestock feed Pembe Milling Lusaka Livestock feed Namfeed Lusaka Livestock feed Source: Authors’ compilation

4.2.6 Wholesaling/Retailing

Most processors that produce cooking oil and stock feed tend to have both wholesale and retail outlets and/or retailer agents. Other wholesalers and retailers also trade in these commodities. The products meant for human consumption other than cooking oil are more often stoked by chain stores and supermarkets. These commodities, apart from some soy chunks, are imported through a cold chain and have to be refrigerated until preparation for consumption. The table below shows some of the retailed soy products.

6 HEP stands for High Energy Protein 7 Textured vegetable protein

Page 39

Table 9: Some of the stocked soy products for human consumption

Item Name Brand Name Processor Cooking Oil Soyola Mt. Meru Excella Soya South Africa (imported) Sun Soya (Soya bean Gold) Mt. Meru D’lite South Africa (imported) Soy Chunks/Pieces Golden Goodness Seba Foods (Z) Ltd Milk Good Hope South Africa (imported) Alpro Soya (various flavours) Vegetarian Foods Sausages Hot dogs Burgers Mince Thickcut Chunky strips Polonies Crumbled Schnitzels Samoosas Pies

4.2.7 Consumption

Soy products for human consumption, such as TVP, soy milk, or CSB, constitute an opportunity to substantially improve nutrition for low-income households in Zambia. Human consumption of soy products is fairly low in SSA, with Malawi and Nigeria as key exceptions. Soybeans is mainly consumed by livestock and humans. Livestock dominates the consumption in form of feed, while humans consume it in various forms. In 2010, the amount of Soya Processed for Stock feed and that processed for human consumption was 10,229 and 1,103 MT per month, respectively (Soya beans Assessment Report-ACF: 2011).

The human consumption of soybeans is predominantly in form of refined cooking oil, (with little consumed as crude cooking oil). In 2010 the estimate market in form of cooking oil was 390,000 MT (PROFIT + Value Chain Assessment and Strategy-2012). Lower levels of consumption by humans is in form of HEPs, chunks (soy pieces), flour (for porridge and baking), milk, sausages, hotdogs, burgers, polonies and mince (See Table 9). Human consumers of the above products constitute both individual households and institutions, such as schools, clinics/hospitals and nutrition centres.

Much of the resistance towards soybean consumption has been due to its taste and short shelf-life (processed). NFNC had in the past been researching and/or working on improving these soybean attributes. There is, therefore, need for continuous research and development of new products, and sensitisation in this area.

However, there appears to be an increasing/high demand for finished products as long as they are packaged attractively and priced within the range or cheaper than imports; e.g. cooking oil, sausages, hotdogs, mince, burgers, milk, etc. which demonstrate that this sector can be stimulated. Zambia, with only a nascent human consumption market, can expect to see growth rates in demand of more than 8% a year. Projects, for example the FAO’s “Support for the Promotion of Agro-processing among scale farmers”, has been supporting value-addition of various traditional crops, including soybeans. Trainings of smallholder farmers in value-additions and publications of books showing various menus of processed traditional foodstuffs have been and/or are being undertaken.

Page 40

Particularly, Milk, Sausages, Hotdogs, Burgers, Mince, Polonies and some Chunks are all imported products, largely from South Africa, and are mainly stocked/sold by the Chain stores: Shoprite, Spar and Pick n Pay. The fact that these products are being consumed in Zambia, apparently at an increasing rate (although consumption levels/rates have not been established), presents an opportunity for investment in local processing of these products.

Page 41

5.0 KEY OPPORTUNITIES FOR YOUTH PARTICIPATION

The following are key opportunities for youth participation across the value chain:

1) Input supply: The main opportunities for youth participation in input supply is in community based agro-dealership to address limited access to inputs especially among farmers in remote areas of rural districts. Currently, the challenges that a youth willing to venture in such a business would face are lack of financial resources for initial investment, skills in business management and linkages to an assured supplier. The youths can be trained (through customized short courses at farmer training centres or trades schools) and linked to financial service providers like NATSAVE who offer group lending facilities and major input suppliers like central business district agro-dealers to purchase stocks on cash basis. Buying on cash from the agro dealers removes the insecurities of failure to remit that some input suppliers reported as being the main challenge when dealing with community based agro-dealers. Lessons can be learnt from already existing supported relationships such as under Musika Development Initiatives. With community agro-dealerships, youths will be able to benefit from having decent employment while increasing smallholder farmer access to inputs, reducing access costs and increasing production, productivity and profits. The extra income earned from supplying inputs could be used to meet household food and income security needs. Youths already involved in soybean production could take an opportunity to use their fields for seed multiplication and as demonstration plots by private seed and agro-chemicals companies. In this way youths can also benefit from the knowledge/expertise and extension services provided by these input companies. 2) Production: One of the most important incentives for soybean production, which is lacking, is access to established and stable markets. Also, there is a tendency by youths to engage in agricultural activities that have quick and high returns. Soybeans production has been shown to be highly profitable with an unmet demand for processing in other industries. The early market season would also allow the youth farmers to get quicker returns for their investments when compared to other field crops. To see the potential for profits in soybeans, youths need more exposure to farmers who are doing well in soybeans for them to be able to see what is possible. Also, this needs to be supplemented with basic skills in gross margin analysis for them to make informed decisions when choosing crops to grow at the beginning of the marketing season. The market challenge can be addressed by strategically linking the farmers to buyers throughout grower arrangements or contracts. This way, farmers would be assured of a ready market for their produce while assuring buyers of sufficient quantities for their needs. Some of the farmers could also be linked (or could themselves integrate vertically) to other value chains like the fish and poultry value chains to assure supply of soybeans for feed formulation. This would foster growths not only in the soybean chain but also other chains that it feeds into, thereby increasing demand for soybean. Linkages to other projects like the P4P would be mutually beneficial. 3) Provision of mechanized services: Without any form of mechanisation, a household that has grown a hectare of soy beans would need to manually harvest, thresh and pack the produce in about 12 bags. This is in addition to other farming and non-farming chores. Introduction and wide appreciation of harvesting and threshing machines will assist in up-scaling as the drudgery that the manual processes create would have been addressed. This would help usher producers to grow to levels that enable them benefit from economies of scale. Within the context of “multiform mechanisation” appropriate equipment ownership arrangements can be explored. Though the equipment may appear cheap, there could be hidden costs in terms of need for regular maintenance and replacement parts. As such, there is need to develop a cadre of individuals that are able to not only eventually fabricate such equipment, but who are able to maintain them in good state of repair. This may be an opportunity for youths and local technical training institutions. Intermediation may be required in identifying an appropriate relationship structure between the providers of equipment, the financiers and the local smallholder

Page 42

farmers. There is an important role to be played in facilitation of clustering of smallholder farmers to enable economical access to harvesting and threshing equipment. Given the largely unimpressive history of rural cooperatives in Zambia, this facilitative role will not be as easy, and will require influencing mind set and practices through the use of appropriate organisation development approaches. Support could be provided to youth-owned/run enterprises that could be hiring out harvesting and threshing services provide bulking facilities and also provide market information that assists farmers determine when to offload their produce. 4) Aggregation/Marketing: Opportunities exist for youth to participate in aggregation through the following means:  Facilitating small scale farmer clustering to increase volumes and negotiating power e.g. WFP’s P4P;  Support to local agro-dealers (with youth involvement) to enhance their capacity to aggregate and market soy from small scale farmers e.g. WFP’s P4P;  Advocating for establishment of warehouse receipts system e.g. WFP’s P4P; 5) Processing: Most commercial processors employ a good number of youth to work in their processing plants. The processors have preference for mature and energetic youth aged between 20 and 40 years. There are no specific educational requirements for the youth to work in these plants as the work they do is mainly mechanical and they would be under the supervision of a plant supervisor. Other opportunities for the youths in collaboration/linking with the processing industry include: marketing of processed products (cooking oil, cake, feed etc.); labeling and packaging and soybean production and selling (bulking) for processing, under contracts. Key leverage points are:  There is need for more awareness on the benefits of processed soybeans among the producers of soybeans with the hope that they could vertically integrate into soybeans processing.  Potential for increasing home processing through increased information on home recipes e.g. soy sausages, cakes, meatballs, etc.  Need for developing appropriate and low cost technologies to address various technological challenges in the value chain, e.g. heating and grinding of soybeans.  Several lessons can be learnt from the success of sunflower where most farmers continue to process it for home consumption or sell oil to the local market. Setting up SMEs with small scale equipment for roasting and crushing soybeans, where the capital-constrained farmers can be taking their soybeans for processing, like they do for sunflower.  Considering the promotion of crop-livestock integration which will not only promote local processing of soybeans, but will also provide additional livelihood activities for farmers (including young people). This is especially so during dry season when they are not producing any rain fed crops.  Training efforts in processing of soybeans coupled with linkages to markets for the processed products.  Processing Equipment8: In general, youths could take advantage of the local equipment manufacturing companies, such as SARO, UNZA-TDAU and CAMCO, for acquisition of appropriate small scale equipment for use in the different links of the soybean value chain. Some available technology that could be used by the youth that wish to venture into the processing of soybeans are roasting cylinder, oil expeller capacity, combined oil expeller and an oil filter/purifier. o A roasting cylinder is mainly used to initiate the processing of soybeans. Its main purpose is to roast the soybeans seed. Current prices for the roasting cylinder are K13, 216.

8 This is the equipment currently available from SARO Equipment Limited.

Page 43

o An oil expeller is used to expel oil out of soybeans that has been roasted. The end product is usually the oil and soy cake. Oil expellers of capacity 0.8 MT to 1 MT of soybeans per day are going for ZMW9, 341. o Combined oil expeller – this roasts and crushes the soybeans. The market has 4 to 5 MT/day capacity combined oil expellers going for ZMW 14, 300. o The oil filter/purifier is used for refining the soybeans oil obtained from the crushing process. The market has 1.1kilowatt oil filters/purifiers going for ZMW 11, 266.  Where financing is available to producers or youth run MSMEs, they could access this equipment, where financiers could recover money in about 3 years.

Page 44

Mini-Case of a Young Female Small Scale Farmer Astridah Namonje (31) has been a teacher at Chijemu Primary School in Chief Mwase’s area of Lundazi district for over 5 years. Through encouragement from a fellow teacher based at another school, Astridah decided to try growing Soy beans. She had struggled to raise the necessary funds for her usual maize-growing, and so thought Soy beans would not only be less financially demanding but would also be able to get to maturity in the period of rainfall that was still ahead. The friend also helped her with seed kept from the previous year’s harvest. About 10 x 50 kg bags are expected from a portion estimated to be under a hectare. A total of K450 was spent on hired labour for field preparation, weeding, harvesting and threshing. No fertiliser was used. Astridah was dissatisfied with the volume, and felt that Soya was best grown on larger portions of land than she had used. In her view, a larger harvest would give her more market options, as she could hire her own transport to Lusaka or into Malawi instead of selling to intermediaries. Farming has always been a part of Astridah’s life. She grow up with a mother that also combined teaching and smallholder farming to supplement household income and improve food security. From top to Bottom: She is aware of many other young people that are (1) Astridah Namonjo, a Teacher in growing Soy in the area and thinks that Chief Mwase area; collaboration would improve their opportunities to (2) Astridah’s Soya bean harvest get more out of the undertaking. She sees one ready for threshing; and challenge as being that young people want to sell (3) Hired labourers threshing some quickly, and so do not get the best price. of the crop Processing is an option she thinks need to be explored, especially that the area has now been connected to the national electricity grid.

In general, the youth could/should take advantage of the Youth Development Fund (YDF) under the Ministry of Sport, Youth and Child Development (MSYCD) to apply for funds to specifically finance business enterprises within the soybean value chain.

Page 45

6.0 POTENTIAL FOR RURAL FOOD/NUTRITIONAL SECURITY

Soybeans contributes to food and nutrition security as a rotational crop to cereals to enrich the soil (hence improve yields), cheaper source of protein when consumed in various forms (products), and a source of income (when produced and sold) to enable purchase of other foodstuffs for food and nutritional security. It is a good source of income, as there is high and growing demand for soybeans, for both local processing (within Zambia) and for export.

At the domestic/household level, soybeans can be consumed in various forms including cooking oil, flour, milk, sausages, hotdogs, mince, burgers, fritters, polonies. Some processed products within the rural communities are available to the rural inhabitants, and apparently not on commercial basis, but only to the processing households (own consumption). The most common processed products available to rural communities are cooking oil and chunks (soy pieces). On the other hand, most of the soy products processed outside the rural communities, particularly imported products, are not available to rural communities.

The soy products processed outside rural communities, i.e. nearly all imported products (e.g. sausages, mince, hotdogs, milk etc.) and some locally processed products (e.g. livestock feeds) are not mostly available in rural communities. This is largely because the suppliers of these commodities (that is, end- markets such as the Chain Stores and commercial stock feed suppliers) are not found in rural communities. Also most of these products tend to be expensive to most rural households, hence the low demand. There is also an element of “ignorance’ on the consumption/nutritional aspect of these products, by most rural households. In the case of livestock feeds, there are few commercial livestock farmers located in these rural areas.

Page 46

7.0 CONCLUSIONS AND RECOMMENDATIONS

Production: Smallholder soybean productivity is generally hampered, in addition to use of local recycled seed and non-application of inoculum, by less than optimal management practices especially late planting as most smallholders prefer to plant their maize crop first. This is mainly because of perceived soybeans output market unpredictability and that maize is a staple food. This issue can be overcome by general awareness raising and potential synergies can be built with the FAO implemented CASU Project which promotes, among other things, legume rotations (e.g. soybeans) in conservation farming cropping systems. This together with optimal input use would increase productivity and profitability though there would need to be linkages to output markets at the next stage of the value chain. Within the production function of the value chain opportunities exist for rural youths to provide contracted mechanical services for land ploughing, harvesting and threshing to enable smallholders grow and manage larger plots of soybeans. Appropriate implement suppliers are available (locally) and financing arrangements can be facilitated as is already being done with Musika Development Initiatives and the ZNFU Lima Credit Scheme and Bunjimi Assets Plus, for example, including applying for credit financing under YDF and

Page 47

CEEC. Based on the above Recommendation 2 is Improving Production/ Productivity through Strengthening Market Linkages with emphasis on:  Creating and enhancing linkages between producers, aggregators and processors;  Improving flow of market information to stimulate production and productivity;  Greater farmer exposure;  Develop synergies with projects under FAO’s CASU, WFP’s P4P, Musika, ZNFU, NAIS, etc.;  Improved access to technologies, extension and finance; and  Creation of opportunities for vertical integration.

Processing: There is currently adequate installed processing capacity for commercial soybeans processing but processing for human consumption is largely inadequate. It is presumed that demand for human consumption is low due to lack of awareness of benefits of consuming soybeans products, availability of substitute products, unfamiliarity, taste and short shelf life. However, importation of various soybean- based products available in supermarkets is a sign of relative product availability and uptake and that processing could be hampered by processing equipment and skills and/or cost while the market potential may be unknown. Processing innovations exits at household level but there seem to be no scaling up: some household processing challenges could be overcome by general awareness raising and potential synergies can be built with the FAO implemented Project, “Promotion of Agro-processing among Small Scale Farmers in Zambia”. There is otherwise existing potential demand for soy milk and soy flour for school feeding programmes under WFP and under-five clinics and designated wards in hospitals under the Ministry of Health. All in all, there is clear evidence of soybean uptake for human consumption but current understanding on volumes, motivation, market segments, market prices and market growth is limited. This calls for dedicated market study to increase this understanding and design appropriate intervention measures.

Page 48

Page 49 this plant will largely source its soybeans from the northern parts of Central Province and the southern parts of Muchinga Province including Mbala and Mungwi Districts of Northern Province. This gives opportunities for youth employment in input supply and output aggregating/marketing. In summary, Recommendation 8 for Location of Pilot Programme recognizing the need for strong links with other actors FAO CASU, WFP P4P, MSYCD, COMACO, ProfitPlus, etc. is as follows: 4) Eastern Province (Lundazi, Sinda and Petauke):  Focusing on smallholder participation across value chain, with much scope for further development; 5) Central province (Mkushi, Mumbwa and Chibombo):  Focusing on high level of commercialisation with good opportunities for providing demonstration; and 6) Northern Province (Mporokoso and Kasama):  Focusing on MSYCD activities around training and processing

Page 50

REFERENCES

ACET, 2013: Africa’s Soybean Processing Opportunity. Available on http://acetforafrica.org/publications/post/the-soybean-value-capture-opportunity-in-africa/

ACF, 2011: Soybeans Assessment Report. Lusaka, Zambia.

Chisanga, B. and N. J. Sitko, 2013: The National Consumption Requirement Study for Edible Oils in Zambia. Paper submitted to the Zambia National Farmers’ Union on 21st October, 2013, Lusaka, Zambia

Keyser J., 2007 “Competitive Commercial Agriculture in Sub–Saharan Africa (CCAA) Study: Zambia Competitiveness Report” The World Bank Environmental, Rural & Social Development Unit Africa Region, Washington DC

Lubungu, M., W. J. Burke, N. J. Sitko, 2013 “Analysis of the Soya Bean Value Chain in Zambia’s Eastern Province”. Indaba Agricultural Policy Research Institute (IAPRI) Working Paper 74

PROFIT+, 2012: Value Chain Assessment and Strategy. Presented on 17 October 2012, Zambia

TechnoServe, 2011: “Southern Africa Soy Roadmap –Zambia value chain analysis”.

TechnoServe, 2012: Zambian Soya Value Chain: Alignment across Producers, Crushing Industry, Animal Feed Manufacturers, and Poultry Producers. Presentation at Stakeholders’ Workshop on 16 May 2012 in Lusaka, Zambia.

World Watch Institute, 2005: Soybean demand continues to drive production. Accessed on 8th May 2014 at www.worldwatch.org/node/5442

Page 51

ANNEXES

Annex 1: Primary Data Collection Tools

A. Farmer Focus Group Discussion Guide

# Suggested Questions Issue 1  What sources of soy inputs (seed, fertiliser, inoculum, other chemicals, etc) do you know Access to good of? quality inputs  Are there any preferred varieties? Why these varieties?  What are the prices?  Do you see them as high/low/moderate?  To what extent do you use improved varieties? Why? What can be done to improve the situation?  Have you had shortages of inputs in last 2-3 years? What was in short supply?  What is you view on quality of inputs supplied? 2  What are some practical differences between growing soy and growing other traditional Actual & crops e.g. maize, groundnuts, etc? potential  What practices do you know that enhance productivity of soy? production &  What are the average field sizes for those growing soy? related issues  What is the average yield (50 kg bags) per Ha or Lima?  Are there any young people that are involved in soy production? If yes, who?  Why do you think young people are generally many/not many?  What could be done to attract young people into agriculture (as farm workers, as owners, as transporters, processors, etc) in general & soy in particular? 3  Do you have any contract farming arrangements for the production and supply of soy Contract beans with your buyers? farming  If you do, what kind of production support do they provide?  What other contractual conditions apply in your contract farming arrangement?  If you do not have any contact farming arrangement, is this something you would be interested on venturing into (especially if your buyers are interested in buying huge quantities and would like a steady supply of the product)? 3  Do you think soy production is worthwhile undertaking? Why or why not? Viability of  What are the production cost elements (activities) and amounts per Ha or Lima? production  What is the farm gate price?  What the transport costs like, and where to?  What are the major challenges (if not already mentioned)? 4  What information or advice have you received on soy production, and from whom? Extension  Do you know of individuals and institutions that you think understand soy production support very well and are able to support producers? 5  Are there any forms of small-scale soy processing taking place at farm level (including any Potential and traditional household soy processing)? actual  If yes, what methods & technologies are being employed? Who is doing it? processing  If no, why is this the case, and what could be done to encourage it (if at all)?  What technologies would be required in order to undertake small-scale soy processing?  Are there young people involved in processing? 6  Where do you think the market for soy is? How big could it be? Where is it? What do the Understanding buyers do with it? of the market  Are there soy products in the local shops? Which ones?  Do you consume processed soy products? 7  Have you noticed any cross border trade in raw soy beans? Soy bean  Who buys most of the beans in your area (locals vs foreigners)? exports, volume  Do you know who these traders are (middle men or final users of the product)? of exports and processing  Do you know who the final users of the raw soy beans are (small scale/community level involved by the processors or large commercial processors)?

Page 52

 Do you know what those small scale/community level processors are processing the soy foreign buyers beans into?  If the locals are not involved in processing as their foreign counterparts, do you think they could also engage in this type of processing? 8  What soybeans products are consumed in this community? Potential and  Are they produced locally? If yes how? Cost, Price? actual local  If sourced from other areas, where, how far? Cost, price? consumption of soybeans  What groups of people in the community consume soybean products more than the others? Why?  What can be done to increase local soybeans consumption?

B. `Individual Key Informant Discussion Guide

# Suggested Questions Issue Possible Key Informant 1  Which do you think are the leading input suppliers in this Access to soy PACO, DACO, Agric. town that you? inputs Officers, farmers,  Which of these are more likely to stock soy seed and other ZNFU, (& New inputs? Union), NGO,  Are you aware of any soy input shortages in the last two WEDAZ, ZCF, years? Marketeer, transporter, DBA 2  Do you know any farmers and/or areas that grow soya Knowledge & PACO, DACO, Agric. beans? perceptions on Officers, farmers,  What do people say about soy bean growing (e.g. is it soy production, ZNFU, (& New hard/profitable/etc) actual/possible Union), NGO,  Why do you think (more) farmers are growing (not growing) barriers WEDAZ, ZCF, soy? Marketeer, transporter, DBA 3  Are there individuals or institutions where one can get Existence & PACO, DACO, Agric. information of soy production/ processing/ marketing? effectiveness of Officers, farmers,  Which institutions provide extension services for soy? extension/ ZNFU, (& New  Do you think there are many individuals/institutions that technical services Union), NGO, have good understanding on how to grow/process soy/find / training WEDAZ, ZCF, market for soy? /information Marketeer, transporter, DBA  Who provides business development services? 4  What local processing activities do you think are possible Existence of with soy? processing  Which of these do you know of that are taking place at activities and following levels: household, town, province, elsewhere? enablers/obstacles  Who is doing processing?  What do you think has helped/hindered soy processing? 5  How are goods generally transported from the farms/the Access to district? transportation and  Who owns the means of transport used? possible  Do you think commodity transport costs are destinations/ high/low/affordable? markets  Which directions do commodities go from the farm/town/province?  Do you know of market opportunities for soy? Who do you think buys & what do they do with it? 6  Are processed soy products available in shops? As many individuals as  Do you think soy products have a good market in the possible (e.g at the district? lodge, etc.)  Do you consume any of the soy products?

Page 53

7  Which agri-business actors do you think find it easiest/most Access to finance difficult to access finance?  Which other small-scale businesses do you think find it easiest to access finance? 8  What businesses do you think most youths are (or would Opportunities for like to be) engaged in? youth (&  Are there any opportunities that appear particularly specifically young appropriate to young women? women)  Do you know of youths in agric. production/processing/ transporting/marketing?  Do you know what the gross margins could be for soy (production, processing, marketing finished goods)? 9  Have you noticed any cross border trade in raw soy beans? Soy beans exports Farmers, PACO,  Who buys most of the beans in your area (locals vs and the DACO and Agric foreigners)? processing Officers  Do you know who these traders are (middle men or final involved. The users of the product)? possibility of local youth tapping into  Do you know who the final users of the raw soy beans are that processing (small scale/community level processors or large sector commercial processors)?  Do you know what those small scale/community level processors are processing the soy beans into?  If the locals are not involved in processing as their foreign counterparts, do you think they could also engage in this type of processing?

C. Field Observation Guide

# Issue Indicator/Question 1 Roads – State & Distances  Tarred/gravel  Maintained or not  Distances between key points – e.g. CBD, input access point, production point, bulking point, processing, etc.  State of bridges  Any flood plains affecting roads (e.g. impassable in rain season) 2 Population Distribution  Houses at relatively short intervals (affects extensive cultivation & choice of crops)  Are households near a main road or deeper inside?  Location of fields in relation to households (is it home garden and distant fields?)  Is it farmer settlements or traditional villages? 3 Natural conditions & their impact on  We need to know what the growing conditions are so we can choice of crop observe things like soils, terrain, vegetation, impact of rainfall, fertilisers, etc. 4 Telecommunication  How far does cell phone network go towards actual/potential production areas?  Quality of network  Which network? 5 Transportation  Different/typical modes of transportation met on the road (or seen parked at households)?  Frequency of transport on the route? 6 Levels of Private Investment  State of domestic infrastructure (permanent brick houses or mud, solar panels, satellite TV dishes, permanent storage burns, livestock shelters, etc.)  Tractors and other farm equipment

Page 54

 Size of fields,  Number of cattle observed  Farm fencing  Shops, bars, etc. 7 State of Soy field  Size of soy bean field relative to other crops (e.g. any evidence of competing crops)  We need to know what a healthy soy crop looks like, and what to read from what we see!! 8 Other Infrastructure  Schools, Clinics

D. Gross Margins/Value Addition/Transportation Questionnaire

Section A. Identification

A1 Province ______A2 District ______A3 Company name ______A4 Address of the company ______A5 Telephone number ______A6 Email address ______A7 Main activity in soybean value chain ______A8 Name of main respondent ______A9 Designation of main respondent ______

Section B Products B1. Please B2. Is B3. If no B4. How often is this B5. How much do you B6. What is list all the this a to B2, product produced produce/can be produced at the current products main what is the (complete production each cycle? price per unit you product main cycles) of product? produce/can 0=no product 1=per day be produced 1=yes, that results 2=per week (including skip to in 3=per month by-products) B4 production 4=per year Unit of of ….? 5=other, measure (e.g. ZMK Frequency specify quantity kg, litre)

Page 55

Section C. Machinery and Equipment C1. What key C2. C3. Where can this C4. Price C5. Approximately how C6. What is equipment/ma Number of equipment be sourced? per unit much does it cost to the chinery is units of of …… maintain …. (e.g. approximat needed for machinery/ 1=locally with district (ZMK) including oils, e life span production equipment 2=out of district within replacement parts etc.)? of this country Amount Frequency equipment? 3=out of the country (ZMK) 1=per production cycle 2=per day 3=per week 4=per month 5=per year

Section D Variable costs D1. Please list all the D2. What are the key D3. Number of units for one D4. Price per D5. Main main products from inputs needed to complete production cycle unit of input. source of input section B question B1 produce …..? 1=locally with Quantity Unit of district measure ZMK 2=out of district within country 3=out of the country

Section E labour use E1. How many people do you need to provide labour for your production activities per month? ______E2. Currently, how many people are working in your plant? ______E3. Approximate total labour costs per month. ZMK______

Page 56

Annex 2. Terms of Reference

1. Background

Zambia’s demographic statistics reveal a largely young population with 20.8% of the population aged between 15-24 years and 36.7 % between 15-35 years. This is largest population of young people that Zambia has ever had in its history. This demographic structure has a direct impact on the Government’s efforts towards achieving the nation’s economic development objectives.

Economic growth estimates for 2012 were that the real Gross Domestic Product (GDP) grew by 7.3% compared with 6.8% in 2011 and that real GDP per capita, rose to an estimated US$1,500.0 in 2012 from US$1,463.0 the previous year. The services sector which consist the single largest sector contributed about 46% to GDP followed by industry which accounted for 36%. Within the GDP composition, the fastest growing sector was mining and extractive industry, which after recovering strongly from the 2008 financial crisis recorded 17.6% and 10.8% growth rates in 2009 and 2010 respectively (World Bank, 2011).

Despite impressive economic growth trends, significant gains in job creation, equality and poverty reduction remain. Extreme poverty in rural areas (57.7 %) is four times higher than in urban areas (13.1 %) and the country will have to reduce extreme poverty by 13.3 percentage points in the 5 years from 2010 to 2015 to attain the MDG target. Zambia’s income Gini coefficient of 0.60 (Global Human Development Report, 2013), places it in the category of countries with the highest income inequality. Young people have been worst hit by this negative situation with registered youth unemployment currently at 28% in the age group 20-24 years and 16% in the age group 25-29 years. While statistically significant evidence from rural areas is scarce, from ample case-specific evidence it can be safely stated that the unemployment figures for rural areas are higher, particularly if underemployment is also measured. Indications are that youth unemployment rates will continue to rise with about 280,000 women and men entering the labour market in search of work every year. Furthermore, the young people are strongly disadvantaged in the competition for the approximately 700,000 jobs in the formal economy since they typically lack the skills, work experience and social networks of their older peers.

According to a Soy Value Chain Analysis Report (Technoserve 2011), the Zambian soy market is growing rapidly with current production dominated by commercial farmers and considerable scope for more production growth and exports. With approximate production of 112,000 metric tonnes and consumption of about 90,000 metric tonnes, Zambia is a net exporter of soy beans. Technoserve further notes that Soy production in Zambia has continued to grow despite volatility in the market and that this growth has been largely achieved through increasing planting area rather than increasing yields.

There is therefore potential for increasing production even more through introduction of productivity enhancement methods. However, despite strong market potential, soy beans remains a marginally attractive commercial crop due to a high cost base, poor transport infrastructure and uncertain trade

Page 57 policies. It is also still not very attractive crop for smallholders and small enterprises as they lack appropriate inputs, expertise and a sure market. There is therefore need to make improvements along the value chain in order to take advantage of the growing domestic market and export opportunities:

There is currently good soy processing capacity in Zambia, which can increase further through development of more processing units. Most processors are however vertically integrated into feed manufacturers to livestock companies, so their focus is more on making sure they meet their own feed demand.

While Government has in principle drawn a thematic link between youth employment promotion and food security, it is yet to demonstrate how to make this link actionable in practice. For example, none of the MSME development initiatives underway along the value chain for soybeans in the country is tailored towards rural Youth. Unsurprisingly then, the rural youth employment creation track record of many rural MSME development initiatives tends to be mixed; sometimes, the employment creation effect is simply not known since emphasis is laid more on boosting agricultural output or increasing rural household income while the net employment creation effect is really tracked and figures are not disaggregated by age cohort (indicating low-level priority assigned to this target group segment). Where new jobs were created and the figures disaggregated by age cohort, the results show that young people - young women in particular - have been least likely to secure employment.

The Programme on promotion of decent jobs for youth and improved food security through rural enterprise development will therefore seek to support the Zambian Government to increase market awareness regarding the commercialization of Soy beans in order to pave way for the successive development of the market systems underpinning the value chain, maximizing the employment creation effects in the process; facilitating a more enabling local policy environment for the development of the market system underpinning the production and processing of soybeans, with the view to accelerate the rate of market entry by young entrepreneurs and the contribution of Soybeans towards food and nutritional security in Zambia.

Against this background, the ILO wishes to commission a consultancy that will provide understanding regarding the functioning of the Soy beans market system in Zambia including the knowledge, skills, support services available for value addition process with the view to identify opportunities for participation of young people within the market system to establish how the Soy Beans Market System can contribute towards food and nutritional security of rural communities.

2. Research Objective The consultant is expected to undertake a value chain analysis of the soy beans sector with the view to:- a) Quantify potential of the soybean value chain for food security, nutrition and rural enterprise and youth employment. b) Examine the underlying factors (bottlenecks) inhibiting the Soy beans value chain from achieving increased productivity and full commercialization among MSMEs c) Identify the gross margin potential along the various stages of production along the value chain d) Identify opportunities for increasing the soy bean value chain’s contribution towards food and nutritional security in rural areas long the soy bean value chain e) Identify path ways for sustainable change that can unlock market opportunities and youth employment creation potential along the soy beans value chain f) Identify leverage points for interventions that would support the further development of the Soy Beans market system rural enterprise development.

Page 58

3. Target Audience The target audience of the market system analysis results is pre-determined by the target groups of the Programme and includes:- . Selected national-level and value chain specific governmental and non-governmental intermediary organizations with a mandate to promote sustainable business in the rural economy of Zambia, among them prominently the Ministry of Agriculture and Livestock, the Ministry of Youth and Sports, The Ministry of Commerce, Trade and Industry and their executing agencies, the Zambian Congress of Trade Unions and the Zambian Employers Federation and their respective sector affiliates, the Zambian Chamber of Small and Medium-Scale Business Associations and the Zambia National Farmers Union, Youth associations with strategic focus on influencing, setting and enforcing enabling policy, legal and regulatory framework . Providers of financial and non-financial business development support services, with target group focus on rural youth enterprise and economic development. . Young Entrepreneurs with focus on rural based enterprises . UN Agencies participating in the joint programme . International research centers, organizations universities, consortia operating along the value chain in similar countries to learn and transfer best practices to the Zambian environment and eventually accelerate the creation of partnerships with local MSMEs.

The secondary target audience of the Soy beans market system analysis is the Zambian public at large, including actual and prospective customers of soy beans and its by-products

4. Research Analytical Framework The primary interest of the Rural Youth Employment Programme in analyzing the Soy beans value chain is to create a broader understanding of the market system underpinning the Zambian Soybeans subsector with the view to identify the key players relevant for fostering market interactions that can enhance rural enterprise development.

The research will thus seek to identity the constraints and weak points within the Soy beans value chain and market system that are affect its capacity to unlock the potential for job creation and its ability to effectively contribute towards food and nutritional security among local communities.

The research will further seek to establish the underlying causes of these constraints and weaknesses and to identify the leverage points within the value chain upon an intervention strategy by the Rural Youth Employment Programme could be developed.

5. Research Design and Methodology Using the ILO “Value Chain Development for Decent Work” (ILO, 2009) manual as the guide for the research work, the soybeans value chain analysis research should be implemented using a staged approach which should start by mapping the value chain and defining the components of the Soybeans market system and its market players followed by the actual research work.

5.1 Mapping the Value Chain

Page 59

i) Identify the core transactions in the Soy Beans sector and the end products which will be going to the consumers bearing in mind the objectives of the programme with the view to understand the process and the different levels of the value chain. ii) Identify and categorize the market players including key businesses involved in core transactions and those providing various support functions (including government, associations Business Development services providers etc) iii) Create a visual representation of the connections and interactions between businesses and other market players in the soybeans value chain (actor network map).

5.2 Desk and Field Research The value chain market analysis research methodology should include but not be limited to the following:- i) Desk Research - to establish the existing body of knowledge regarding the value chain and to get a snap shot of the market system underpinning the Soy beans value chain.

ii) Field Research – to validate the hypothesis about the organization of the market system and market interactions drawn up during desk research and to further investigate the operations and functioning of specific submarkets relevant to the objectives of the Rural Youth Employment Programme. iii) Analysis and Recommendations – To establish leverage points for interventions and to build consensus about the market development solutions that will help achieve a)increased market entry and participation by rural youth, and b)improved food and nutritional security among rural communities.

6. Expected Deliverables

6.1 The assignment deliverables over a period of three months should include:- . Compilation of an inception phase report including a draft table of contents of the actual research report, and describing the research tools and process, with questionnaires and interview guidelines in Annex two weeks after signing the contract . Documentation of the desk research findings in a draft report at least four weeks after signing the contract . Presentation and validation of the research findings at a stakeholder workshop at least eight weeks after commencement of contract . Documentation of the validated research findings into a final report at least one week after stakeholder validation workshop . Submission of final report at least two weeks after Validation workshop

6.2 The final report of the Soy Beans market system analysis should clearly outline the following:-  A validated definition of the value chain of the Soya Bean market system to be assessed and which will become the building block of the analysis (“scope of analysis”)

. A demarcation of the system boundaries of the defined scope, bearing in mind the parameter outlined above, to allow for the inclusion or exclusion of a given actor and to reduce

Page 60

system complexity down to a level where programme interventions in support of the target become feasible

. The visualization of the network of market players underpinning the defined scope and the value creation process for Soya Bean and its by-products particularly linked to food and nutritional security; in the process, demarcate network hubs, where applicable cluster actors, trace connectors between network hubs and actor clusters, and where applicable also identify a) bottlenecks where lack of connectors translates into poor performance and b)Leverage points for job creation and food and nutritional security.

. The local demand and supply analysis: Overview of the current situation regarding soybean and soy products production supply and demand in Zambia as it relates also to food and nutritional security, including the understanding of the market players, potential volumes, and the “qualification” of such market players including identify their motivations, strategies, success factors and decision making processes.

. The international demand analysis: assessment of the international soya beans and soy bean products market trends and growth areas, major requirements of the actors of the value chain and their partnerships attitudes.

. A SWOT analysis of the soya beans market system to define the strengths, weaknesses, perceived obstacles and levers required to accomplish the scope of the programme. The analysis should identify the most important market players, market networks and segments where opportunities for rural youth employment creation along the value chain appear most promising. The analysis should also include clear and reliable information about of the soy beans market system in Zambia as it relates to the overall economy, its consumption patterns and links to food and national security. The following factors should be highlighted:

. The identification of intervention points to boost system performance, by way of strengthening existing connections, creating new connectors, redefining relationships between market network hubs, and between network hubs and clusters of other market players. . A set of research tools which can be used to continue querying market system operations by way of dialogue during the programme implementation and using the identified leverage points as reference

. A list of leverage points with employment creation potential within the soy market system, involved market players, networks and segments. . Classification of the local and international “market players” to be contacted during programme implementation for their possible involvement in youth employment creation activities and effort towards achievement of food and nutrition security among rural communities. . A set of recommendations for a) Support interventions that the Programme should undertake in order to contribute towards upgrading of the soybeans market system in Zambia whilst achieving high rural youth employment levels and enhanced food and nutritional security among targeted rural communities

Page 61

b) Geographical locations in which the Programme should focus its support interventions in order to fully achieve its objectives.

7. Implementation Timeframe The assignment should be completed within a period of four calendar months, starting in February 2014 and ending in May 2014.

 Desk Research should be completed by end of 28th February 2014

 Field research should be completed by 31st March 2014  Draft report and preparation for presentation to stakeholders by Mid-April 2014

 The stakeholder workshop to validate the research findings should take place by 30th April 2014

 The Research report should be submitted by 9th May 2014.

8. Other Terms and Conditions 8.1 Bidding Terms Service providers are requested to bid as consortia preferably made up of international and local experts, organizations or academia. Consortia not involving at least one Zambian party in the core team will not be accepted. Each bid should contain a technical and a financial proposal, submitted as separate documents.

8.2 Technical Proposal The technical proposal will need to demonstrate understanding of value chain and market system analysis and its application towards supporting rural youth employment promotion and food and nutritional security enhancement. Furthermore, the technical proposal should expand on the research methodology, with a detailed description of the research process, methods, and tools for primary data collection.

8.3 Financial Proposal The financial proposal should contain a detailed breakdown of cost categories, including the spread of expert days (separate for junior and senior local or international experts) across each step of the research process.

Page 62

Annex 3: List of Stakeholders Consulted

Name Position District Institution Phone E-Mail

Mr Joshua Shonga Regional Manager Chipata COMACO 0976694047/ 0955517858 [email protected]

Mr Whiteson Daka Manager Chipata COMACO 0977193910 [email protected]

Mr. Chisanga Shula Production Manager Chipata COMACO 0977285943 [email protected]

Filius Jere Communication Officer Chipata COMACO/Breeze FM [email protected] Mr Kanenga A/PACO & Soy Researcher Chipata MAL 0977371159 Mr Vigil Malambo Manager Chipata District Famers Association

Mr Alfred Chilekwa Input & Productity Manager Chpata Profit Plus 0971256612 [email protected]

Mr Moses Mbawo Market Dev manager Chipata Profit Plus 0971256644 [email protected] Mr White Banda Chairperson Lundazi District Farmers Association 0977411224 Mr Musonda Provincial Youth Coodinator Chpata Ministry of Youth & Sport 0977582164 Mr Ishmail Mwale Director Chipata Wonder Feeds 0977743549/0955887125 Mr Justin Kapompo Branch Manager Chpiata NATSave 0955767518/ 0978013747 Mr Silembo Senior Agric Officer Lundazi MAL Mr Sikombe DACO Petauke MAL 0955998337 Mr Mupemo A/SAO Petauke MAL

Mrs Mirriam Mwale Principal Chipata Chipata Trades Training Institute 0977370130 [email protected]

Mr Enai daka HOD - Business Chipata Chipata Trades Training Institute 0978007499 [email protected] Mr. Chiluba Wabalika DACO Mkushi MAL 0966697171 [email protected] Mr. Josphat Phiri Mkushi ZNFU 0979071470 Mr. Victor Chisi Mkushi Musika 0977 871575 Ms Molly Musonda Sales Agent Mkushi SeedCo [email protected] Mr. Mtasiwa Kumwenda Branch Manager Mkushi ATS Agrochemicals 0979430677 / 0965807171 /[email protected] Mr. Lesta Shenton Mkushi Agri Options Ltd Mr. P. R. Jacobs Mkushi AfGri Mr. Peter Mukuka Farmer Mkushi Individual Mr. Jonathan Kani Farmer (Contact farmer-ZNFU) Mkushi Individual Mr. Banda Farmer Mkushi Individual Mr. Brian Nzima SAO Mpongwe MAL 0977415306 [email protected]

Page 63

Name Position District Institution Phone E-Mail Mrs. Christina Selemani Mikwala Farmer Mpongwe Individual Jimmy Mulungushi Farm Manager Mpongwe Emmanuel Mutati Farms 0961482888 Emman Farming Enterprise Mr. Arthur Coetzee Masaiti (EFE) Mr.Richard Moyo Assistant Farm Manager Kabwe CMR Farm Ms Etambuyu Anamela DACO Chibombo MAL 0955786268 [email protected] Mr. Samuel & Mrs. Ruth Malangi Farmers Chibombo Tuleya Kunemba Cooperatives Mr. Kunal Manager Chibombo Mt. Meru 0972057210 Mr. Nyirenda Mumbwa ZNFU Mr. Chanda Mumbwa ZNFU Mumbwa District Farmer Mr. Austin Shinachize Chairperson & Farmer Mumbwa Association 0979409049 Mr. Patrick Mwalukanga DACO Mumbwa MAL 0977657298 [email protected] 0977932777 / 0965932777 / Mr. Winfor Lukubi DMDO Mumbwa MAL 0955932777 Mr. Masida Siame Mumbwa MAL Mumbwa Agro-Dealers Ms Ireen Siamujaye Chairperson Mumbwa Association (MADA) 0976970828 0974394132 / 0969734446 / Mr. Joshua Cholobesa Land officer Mumbwa Amatheon Agri 0954671693 [email protected] Mrs. Mwila Ngosa Supervisor Mumbwa FARMARAMA 0955991461 / 0974000697 Principal Food Processing & Ms. Nancy Cheela Storage Officer Lusaka MAL HQ 0977445699 [email protected] MAL HQ (Dept. Agribusiness & Mr. Masiyaleti Mulozo Lusaka Marketing) 0979422052 [email protected] Mr. Musonda Mofu Deputy Executive Director Lusaka NFNU 0978792214 Mr. Mecha C. Ponde Lusaka TechnoServe 0977961027 [email protected]

Elvis Silembo Cooperatives officer Lundazi MAL [email protected]

Holmes Lubanze SAO Lundazi MAL 977703984

Canon Mukuma Programs officer Chipata IITA (feed the future-SIMLEZA) 97746853

Fabian Banda Lusaka UNZA-TDAU

Page 64

Name Position District Institution Phone E-Mail Mr. Chitalu Customer care Lusaka CAMCO 971716553 Mr. Bauleni Production manager Lusaka Tiger animal feeds 977675299 Mr. Simfukwe Stock manager Lusaka Novatek feeds 971252520 Ms. Precious Manager Lundazi Sedia agro-dealers Mr. Patel owner Chipata Sheni agro-dealership

Mr Joshua Shonga Regional Manager Chipata COMACO 0976694047 / 0955517858 [email protected]

Mr Whiteson Daka Manager Chipata COMACO 0977193910 [email protected]

Mr. Chisanga Shula Production Manager Chipata COMACO 0977285943 [email protected]

Filius Jere Communication Officer Chipata COMACO/Breeze FM [email protected] Mr Kanenga A/PACO & Soy Researcher Chipata MAL 0977371159 Mr Vigil Malambo Manager Chipata District Famers Association

Mr Alfred Chilekwa Input & Productivity Manager Chpata ProfitPlus 0971256612 [email protected]

Mr Moses Mbawo Market Dev manager Chipata ProfitPlus 0971256644 [email protected] Mr White Banda Chairperson Lundazi District Farmers Association 0977411224 Mr Musonda Provincial Youth Coordinator Chpata Ministry of Youth & Sport 0977582164 Mr Ishmail Mwale Director Chipata Wonder Feeds 0977743549/0955887125 Mr Justin Kapompo Branch Manager Chpiata NATSave 0955767518/ 0978013747 Mr Silembo Senior Agric Officer Lundazi MAL Mr Sikombe DACO Petauke MAL 0955998337 Mr Mupemo A/SAO Petauke MAL

Mrs Mirriam Mwale Principal Chipata Chipata Trades Training Institute 0977370130 [email protected]

Mr Enai daka HOD - Business Chipata Chipata Trades Training Institute 0978007499 [email protected]

Patrick Chiyanka Former DACO Lusaka Fomerly MAL 0977690075 [email protected]

Daisy Kambandu Commercialization Manager Lusaka TechnoServe 0976579897 [email protected]

Mwiinga Cheelo Emergent Young Soy Farmer Lusaka [email protected]

Simwala Wankumbu Emergent Female Soy Farmer Lusaka [email protected] Astridah Namonje Teacher/Young small soy farmer Lundazi Chijemu Primary School 0978072924

Page 65

Annex 4: List of Participants at ILO Value Chain Development Training Workshop

Name Title Organization Contact number Email Ms. Mali Priscilla Siamubi Planner Ministry of Labour and Social Security +260 977 788992 [email protected] (MoLSS) Mr. Danny Simumba Association Secretary NAMSC +260 966 768763 [email protected]

Mr. William Bwalya Secretary General Zambia National Association for Saw Millers +260 977 995351 [email protected]

Mr. Fanwell Hamusonde Provincial Coordinator (HGSF) World Food Programme +260 978 203319 [email protected]

Ms. Mulako Mwanamwalye Programme Manager National Youth Development Council (NYDC) +260 978 6000985 [email protected]

Mr. Uzi Banda Safety Health Environmental Quality Officer Mount Meru +260 977 489571 [email protected]

Mr. Mpulu Makayi National Programme Coordinator FAO +260 976 268152 [email protected]

Mr. Stephen Mukumbuta Senior Programme Officer World Food Programme +260 974 779526 [email protected]

Ms. Sepiso Mate Economist Ministry of Agriculture and Livestock (MoAL) +260 977 398796 [email protected]

Mr. Bernard Mumba Principal Planner Ministry of Labour and Social Security +260 976 154008 [email protected] (MoLSS)) Ms. Kapaya M. Imakando Planner Ministry of Youth and Sport (MYS) +260 979 155431 [email protected]

Ms. Yvonne Mwanza Lake Operations Coordinator Lake Harvest +260 963 468730 [email protected]

Mr. Stanley Mushingwani Acting Principal Agr Ministry of Agriculture and Livestock (MoAL) +260 966421484 [email protected] /+260 977 406079 Mr. Munguzwe Hichaambwa Senior Research Associate Indaba Agricultural +260 977 867610 [email protected] Policy Research Institute (IAPRI) Mr. Apo Chisha Mwila Training Coordinator Alliance of Young Entrepreneurs +260 979 938908 [email protected]

Mr. Hilary Chilala Hazele Manager - Economics and Policy Zambia Federation of Employers (ZFE) +260 977 864975 [email protected]

Mr. Mtendere Mphatso Programme Officer FAO +260 971 651840 [email protected]

Mr. Dennis Sikaulu Enterprise Development Officer Zambia Development Agency (ZDA) +260 977 894345 [email protected]

Page 66

Name Title Organization Contact number Email

Ms. Musonda K. Chitah Economist Ministry of Commerce Trade and Industry +260 975 654833 [email protected]

Ms. Tibone Moyo Economist Zambia National Farmers Unions (ZNFU) +260 977 773003 [email protected] [email protected] Ms. Mutebele Kunda Director Education & Training National Union of Plantation Agriculture +260 966 855976 [email protected] Enterprise Allied Workers Ms. Tidzitwa Zulu Gender and Rural Markets Manager MUSIKA +260 977 310710 [email protected] [email protected] Ms. Muma Munansangu Monitoring and Evaluation Officer Citizens’ Economic Empowerment +260 977 474255 [email protected] Commission (CEEC) Mr. Ones Karuho Regional Program Manager, Southern Africa TechnoServe +260 974 779 538 [email protected]

Mr. Conrad Muyaule Value Chain Coordinator World Fish, Katima Mulilo Road No. 37417, +260 977837157 [email protected] Olympia Park Ms. Aurore Rusiga P4P Country Coordinator WFP +260 978 779651 [email protected]

Ms. Tembekile Musvosvi Country Director ADRA +260 976 740237 [email protected]

Mr. Mulenga Kennedy Senior Agricultural Economist Ministry of Agriculture and Livestock (MAL) +260 966 408730 [email protected] Ms. Pity Halwindi Senior Youth Development Officer Ministry of Youth and Sport (MYS) +260 977465640 [email protected]

Mr. Kennedy Muma Mukupa Chief Youth Development Officer Ministry of Youth and Sport (MYS) +260 955640794/+260 [email protected] 979 960054 Mr. Bernard Mumba Principal Planner Ministry of Labour and Social Security 0976 1554008 [email protected] (MoLSS) Mr. Obert Munkoka Assistant Programme Coordinator Restless Development +260 977 839111 [email protected]

Ms. Milensu Kapaipi National Programme Officer ILO +260 962 220540 [email protected]

Page 67